4 min read

I visited the Venice Biennale for the first time last year and I must admit I wasn’t expecting to be as impressed as I was. I enjoy visiting museums, but they can often be very niche on certain topics, requiring some background knowledge to truly appreciate them. While some cater to a wider audience, I frequently felt like I missed their full potential. So, naturally, I didn’t have high hopes for the Biennale either. How wrong I was!

It was one of the best exhibitions I’ve ever visited and it really made an impact on me. It was an architecture exhibition titled ‘The Laboratory of the Future’. I’ll drop the link below in case you want to learn more: https://www.labiennale.org/en/architecture/2023

You may ask, ‘This was supposed to be an investment blog, what does architecture and the biennale have to do with it?’ Just hang on.

On the second day, I stumbled upon the Turkish Pavilion, where the curators focused on Ghost Stories – unused and abandoned buildings across Turkey. They highlighted the issue of fast architecture, the practice of constructing new buildings without attempting to repurpose older, unused ones. The topic caught my attention, so I bought their printed catalog and read it after my trip. The book revealed that their manifesto drew inspiration from Elizabeth Fisher’s “Carrier Bag Theory of Evolution”. This theory was entirely new to me, but I was eager to learn more.

Fisher argues that the first cultural tool humans used was likely a carrier bag, not hunting tools. This bag allowed them to transport gathered vegetables (Fisher, 1979). It proposes a different view of human development: early humans focused on gathering tools (like baskets and bags) before developing weapons for offense (like spears and sticks). This might seem simple, but I believe it’s not discussed as often as it deserves. It’s certainly more thrilling to discuss the weapons and conquests of early humans illustrated in cave paintings than a mundane bag.

Ursula K. Le Guin also found inspiration in this theory, offering an alternative perspective on storytelling. In her metaphor, stories aren’t linear journeys but rather collections of elements – objects, ideas, experiences – held within a bag. Instead of focusing on individual heroes, the carrier bag narrative emphasizes community, collaboration, and the diverse contributions of different individuals.

This concept resonated deeply with me and stayed with me for a long time. The more I thought about it, the more I wanted to connect it to investing. This led me to the question: what is the “carrier bag theory of investing”?

The Carrier Bag Theory of Investing

Traditional narratives focus on the hero trader who takes big risks and reaps big rewards. They glorify individual stock picking and high-risk strategies. This “hero” image is certainly more captivating than someone taking sensible risks. In my view, the carrier bag theory of investing shifts the focus from the hero trader to a more collaborative and diversified approach. Instead of chasing the next “heroic” stock or making perfect market timing decisions, the carrier bag investor recognizes the value of diversification and collaboration. Taking inspiration from the original theory, my carrier bag theory of investing would be built on:

Focus on Long-Term Growth: The hero’s journey often prioritizes short-term gains and immediate gratification. In contrast, the carrier bag investor takes a long-term view, understanding that wealth accumulation is gradual and requires patience and discipline. The carrier bag represents a safe and secure way to hold and nurture your investments. This translates to a long-term investment strategy focused on steady growth. I think of it as carefully collecting valuable resources and storing them securely for future use.

Diversification: Just like a carrier bag can hold various items, my investment portfolio should be diversified across different asset classes to minimize risk. This ensures a broader basket of holdings that can weather market fluctuations.

Passive Investing: Similar to how a carrier bag doesn’t actively hunt for resources, a carrier bag investment strategy might lean towards passive investing. This involves buying and holding low-cost index funds that track the overall market rather than trying to actively pick individual stocks.

Community and Collaboration: Just as the carrier bag narrative values the contributions of different individuals, the carrier bag investor recognizes the importance of learning from others, whether through investment clubs, forums, or professional advice.

Essentially, my carrier bag theory of investing emphasizes a calm, collected, and long-term approach. It prioritizes safety, diversification, and responsible growth over aggressive tactics and short-term gains. It’s important to note that this may not be suitable for all investors. Some investors might have higher risk tolerance or shorter time horizons requiring a different strategy. However, the carrier bag theory offers a valuable perspective on building a secure and sustainable investment portfolio for the long term for anyone.

References:

1) Elizabeth Fisher, Woman’s Creation: Sexual Evolution and the Shaping of Society (New York: Anchor Press, 1979) 

2) Ursula K. Le Guin, The Carrier-Bag Theory of Fiction (Terra Ignota, 1986)