Investing story - Arctic explorers race

An investing story from Antarctic explorers

What the heck can investors learn from a race between Antarctic explorers? – 3 incredible lessons

An unlikely form of financial and investing inspiration was provided by the first groups to reach the South Pole. During December 1911 and January 1912, separate British and Norwegian expeditions were the first to reach the South Pole. They arrived within a few weeks of each other. As you would hope, both teams were led by well-regarded people:

  • Roald Amundsen led the Norwegians. He was an established arctic explorer, and
  • Robert Scott, a Naval Officer, led the British expedition.

But that’s about where the similarities end.

What the heck has that got to do with investing?

The direct race between these two expeditions, and the major differences in their approach has many surprising similarities to investing. Let’s take a closer look at the top three investing lessons these explorers can offer us.

(Naturally, no harm or judgement is intended with the comparisons).

Lesson 1: Plan, prepare, and learn from the experts

Coming from Norway, a country that’s half covered by the arctic circle of the North Pole, Amundsen hired a team who’d all skied since an early age and included a ski champ as the frontrunner. Despite this, Amundsen was still humble in this area, and he spent years learning from those who knew even more about living and thriving in snow and ice than Norwegians do – Eskimos (Inuit). He immersed himself in their culture and developed skills including dog sledding, how to hunt for seals, kayak, and ice fish. Amundsen even took to wearing the clothes of the Inuit – generally loose furs and animal skins which wicked sweating moisture away from the body.

In contrast, Scott’s British team had more expertise in naval operations. Before the expedition a few of them began to learn to cross-country ski, but this wasn’t compulsory. In Scott’s diary, well into the journey he wrote "Skis are the thing, and here are my tiresome fellow countrymen too prejudiced to have prepared themselves for the event". Scott’s team were dressed in woollen and windproof clothing, and regularly complained of the cold – though no complaints were made in the fur-dressed Norwegian team. Scott's team suffered regularly from snow blindness and sometimes this affected over half the British team at any one time. By contrast, there was no recorded case of snow blindness during the whole of Amundsen's expedition. On the return journey, Amundsen's team rested during the "day" (when the sun was in front of them) and travelled during the "night" (when the sun was behind them) to minimise the effects of snow blindness.

Reflecting the planning undertaken, the food intake of each expedition also played a major part. With the full benefit of hindsight, the rations of both teams could be analysed in detail:

  • The rations of the British team were found to be inadequate in two ways: they were deficient in B and C vitamins, and they did not provide enough energy for the men, and
  • Opposingly, the Norwegian expedition was very well-rationed.

Low key vs high profile

Amundsen was the underdog. His expedition had left Norway in secret in the dead of night. In contrast, Scott’s lavishly funded expedition departed the UK with much fanfare.

How does this apply to our finances?

  • Plan and prepare.
  • Humility helps. Be open minded, listen to the experts.
Racing investment story

Lesson 2: Keep it simple

Perhaps the most critical skill Amundsen had learned from the Inuit was how to dog sled for a long distance over a sustained period of weeks and months. This included how much weight a certain-sized team of husky-type dogs could pull, for how long in a day before they tired. Amundsen’s approach was simple and effective: the Norwegian team would cross country ski alongside the sleds the dogs pulled.

Scott’s British team had an entirely different transport plan. It was complex, and that made it vulnerable. It depended in part on motor-sledges (an early form of tracked tractor), ponies, dogs, and southerly winds to assist the sledges which were fitted with sails. Half of the distance was intended to be covered by man-hauling sleds, and sails whenever conditions permitted. Man-hauling meant men on foot dragging the sleds laden with food and tents etc. The complexity of these arrangements had many issues, including:

  • Ponies’ small hooves and large weight caused them to sink into anything other than very firm snow or ice without snowshoes, most of which were left at Scott’s base camp. Half the ponies were lost by falling through sea ice before the journey began. Ponies' coats easily became soaked with sweat during exertion, requiring constant attention with blankets to avoid hypothermia through evaporation. In contrast, dogs do not have sweat glands — they cool themselves via panting, making them less vulnerable to the cold.
  • One of the three high-tech (for the time) motor sledges was lost through the ice when being unloaded from the ship, and the other two quickly broke down. Due to internal politics, the inventor of the motor sledges didn’t go on the expedition, so couldn’t attempt to fix or maintain them.
  • Man-hauling sleds was intensely difficult.
  • Unlike dogs, which could eat the abundant seal and penguin meat found in Antarctica (or at worst, weaker dogs), the ponies' food had to be carried forward from the ship, vastly increasing the stores that had to be transported as Scott's expedition moved towards the pole.
  • The British were relatively inexperienced with dogsledding, so didn’t make the most of the dogs like the Norwegians. Without knowing it, the British underfed their dogs, making them less effective and more difficult to handle.

Scott made unnecessary and unexplained changes to his plan, including adding another team member to make the final leg of the journey without appropriate resources, such as sufficient tent space to accommodate him, or issuing inconsistent or contradictory orders. Several other areas could have made all the difference for the British, including having more suitably qualified navigators – Scott had one, while five out of Amundsen’s team could navigate.

Both the Norwegian and British teams used the same prefabricated sledges on the trip. However, one of the Norwegians was a carpenter, so during the trip from Norway to the Antarctic reportedly managed to reduce the weight of each sledge from 88kg to 22kg without significantly reducing their strength.

Things weren’t all easy for the Norwegians though; before the main expedition departed, they had issues with their boots, and Amundsen had a major falling out with one of his team leaders.

How does this apply to our finances?

  • Where possible, avoid complexity by keeping it simple.
  • High-tech or overly innovative solutions might not be all they seem.
  • Only change the plan if the objective or situation has changed.
Investing story from racing Antarctic explorers

Lesson 3: Consistency is key

“With sufficient planning, you can almost eliminate adventure from an expedition.” Roald Amundsen

The British struggled to make consistent progress with their various methods of transport, finding man-hauling to be brutally hard work. When storms occurred, they might wait several days for it to pass.

Scott also had to fight with a shortage of fuel due to leakage due to the cold, which reduced the effectiveness of the fuel container caps and allowed fuel to escape. This is a bigger issue than it may sound, as in the arctic, fuel enables heating of tent interiors, cooking, warming up with warm drinks, and melting of ice and snow to cook and drink – which takes a lot of fuel. Due to the abundance of ice and snow, the food carried is low on water to save weight. Scott’s team reportedly knew of the leakage issue but took no measures to prevent it. Scott’s supply depots for the return journey were infrequent, and only marked with a single flag – making them difficult to find considering the large distances and snow. The British team struggled to find depots on the return route, which was a source of concern. Their lacklustre rations made them all lose weight, which further slowed progress as Scott’s team became weaker and more vulnerable to cold, especially on the return trip. (In fact, in a carefully planned re-enactment of both Scott and Amundsen’s trips in 2006, sponsored by the BBC, the British team had to abort due to severe weight loss of all members).

In contrast, Amundsen’s preparations enabled the Norwegians to operate with merciless levels of efficiency:

  • Regardless of weather or terrain, they travelled 25-40km per day, despite spending up to 16hrs a day resting. On days when the weather was good and they made quick progress, there was pressure from within his team to push on, but Amundsen didn’t – his knowledge meant they stayed disciplined and rested the dogs to be ready for the next day’s travels.
  • The return route was thoroughly marked. This included with Norwegian ski course marker flags every 13km, a food container to mark every mile, and food stockpiles made unmissable by bamboo poles flying flags at right angles every half-mile for five miles on either side of the depot.
  • What about fuel? The Norwegians had more than enough. In his time with the Inuit, Amundsen had learned of the fuel leakage issue and the solution – fuse the lids closed.

Norwegian preparation paid off, and with their ample rations and fuel the Norwegians all gained weight during the expedition.

How does this apply to our finances?

  • Even when the circumstances aren’t the best, still press forwards.
  • Preparation pays.
  • Be consistent and be disciplined!

The results

The outcomes of the two expeditions were:

  • Amundsen’s team was the first to reach the South Pole. All returned safely.
  • Scott's party of five reached the pole, finding the markers left by the Norwegians, then all died on the return journey. Some of their bodies and records were found by a search party eight months later. Scott would almost undoubtedly have returned safely with most or all his men with some better planning or some better luck – though it is not for us, as “armchair critics”, to find fault with explorers from the age before aircraft and satellite communications.

The top three lessons investors can learn from these teams are:

  1. Plan, prepare, and learn from the experts
  2. Keep it simple
  3. Consistency is key