Glacier hiking and profitable investing has more in common than you might think...

OK, maybe not everything... but certainly a few worthwhile things.

If you ever get the chance to hike a glacier, I highly recommend it. My chance came a decade ago while backpacking through one of my favorite countries in the world, New Zealand. (And even if glaciers aren’t your thing, you should definitely try and get to New Zealand. To give you a taste of what you’ll find, the dramatic scenery from Lord of the Rings was filmed there.)

The Fox Glacier is a giant mass of ice roughly 7.5 miles long, running along the west coast of the South Island. (New Zealand is divided into two islands, North and South.)

Over the course of its journey from the Southern Alps to the South Pacific Ocean, the ice of the Fox Glacier descends more than 8,500 feet -- like a giant waterfall frozen in time.

The glacier ends in lush rain forest less than a thousand feet above sea level. And, just as all glaciers do, it moves. For the past two decades or so, the Fox Glacier has been creeping forward at a rate of 3 feet per week, or 5 inches per day.

You know those lists of “things you have to do before you die”? I don’t keep one of those. I certainly didn’t have “hike a glacier” tucked away as a mental goal.

But, when presented with the opportunity while tramping around the South Island, my response was the same as that to bungee jumping, hang gliding and sky diving: “Sure, why not?”

The experience was mind blowing, as you might expect. There is nothing quite like ascending a giant mountain of ice. Except a glacier is more like a cross between a mountain and a river, because of the constant shift and flow.

The stately pace of the glacier -- just a few inches per day -- makes the movement impossible to detect with your feet. But as the guides will tell you, a glacier is alive in a way that solid rock just isn’t. The terrain of the glacier changes with every passing day. If you find a trail you like on a normal mountain, you can rest assured that trail will be there when you come back two weeks later. On a glacier, it will be gone.

You might think, too, that glaciers need freezing cold weather to survive. The Fox Glacier doesn’t. The weather was suprisingly temperate the day we went up. I wore blue jeans, a light sweater, a waterproof parka and a baseball cap. At the top of the glacier, after a few hours of climbing, it was blissfully warm with the sun shining down.

As with mountain climbing, the glacier hiking experience can range from peaceful to heart-poundng, depending on what you come across. Because the glacier constantly moves, the guides carve out new paths each day they go out.

At some points along the way you can find yourself staring up at a thin strip of bright blue sky, shimmying sideways through a crevasse formed by 15-foot walls of ice. At other points on the journey you can find yourself carefully stepping in the footprints of your guide, as he (or she) literally carves out a path with an ice axe, sending big chunks of white tumbling down for each foothold. Swing, step, repeat. Swing, step, repeat.

It’s not quite as scary as it sounds. I saw a wide range of travelers on the ice that day, from teenage Brits on holiday to an adventurous Spanish couple in their late 50s. The guides are good about letting you choose the level of difficulty in your ascent, with some parties taking more risks than others.

I tell you what: Glacier hiking would never fly as a U.S.-based activity, though. Can you imagine the insurance?

So what does all this have to do with investing? As you’re about to see, there are more than a few parallels here.

You need the right equipment.

To make your way up a frozen waterfall thousands of feet high, you need the right tools -- just as you do in markets. On a glacier, the key tools are good gloves, good boots, crampons, a waterproof coat or parka, and an ice axe. (Crampons are metal spikes that help your boots bite into the ice.) If you try to go up without any of these, your journey will be miserable -- and possibly quite dangerous.

In markets, your equipment is oriented to information and execution -- the tools required to make smart decisions, and then act on those decisions. This could mean fundamental and technical data, depending on how you invest or trade. It could mean access to quality software, for the purpose of testing ideas or tracking a portfolio. And, of course, there’s the need for a quality brokerage account with varying levels of access -- options, futures, foreign exchange-listed stocks or what have you.

You need the right guide.

If you were born in a crevasse or raised by polar bears, then maybe you don’t need a glacier guide. If you spend 10 hours a day for years on end hacking and carving through ice, you are probably qualified to be your own guide also.

But for most of us, a glacier guide is essential, and going up without one would be foolhardy. A good guide has a feel for the glacier, developed through day to day familiarity and constant observation over time. The guide has hundreds if not thousands of hours carving trails, and so he or she knows the lay of the land -- or the lay of the ice, rather -- in a manner that the rest of us don’t. This experience and wisdom comes via countless small decisions: Should we turn left or right at this ice wall? Should we try to navigate this shelf or go back through the crevasse? And so on.

Markets can be every bit as treacherous as glaciers, if not more so... making a seasoned guide extremely valuable there, too. If you don’t have eight or 10 hours a day to immerse yourself in markets, it could be wise to pair up with someone who does.

You need to step firmly.

In the orientation session before heading out to the glacier site, the guides hammered a few key lessons into our heads. Perhaps the most memorable one for me was the importance of stepping firmly.

When you’re scrambling up a glacier, a sense of balance is extremely important. You have to keep your weight centered over your feet at all times so that the crampons can properly bite into the ice and give you traction. This means being conscious of each step and deliberately settling your weight into each foot.

The tendency for many people is to “tippy toe” -- that is, to take tentative steps instead of bold, strong steps. This is a bad idea. When you step out gingerly on the ice, you tend not to have enough weight on your foot. If you body is leaning back in fear as your foot moves forward, the danger is compounded. The less centered and squared up you are, the more you’re at risk to have a foot slide out from under you... very bad news on a narrow ledge.

The “tippy toe” habit is dangerous in markets, too. You should make your decisions with confidence -- or try not to make them at all. This isn’t an invitation to gin up false confidence. That’s a recipe for disaster, too. Rather, it’s encouragement to do your homework and really develop the courage of your convictions. Be sure where you want to plant to foot before you take that step. And then when you do step, step firmly. Be in control at all times. Don’t tippy toe.

Know that the path always changes.

As mentioned earlier, you can never hike the same glacier twice. That’s because the glacier itself is constantly changing. The relentless forward movement of the ice is a function of gravity and temperature; the frozen waterfall is forever tumbling down and down in super-slow motion. New ledges and crevasses and gullies are constantly being formed. Old ones are constantly shifting and disappearing. The only constant is change.

Markets are forever changing, too, in terms of where the path of opportunity lies. That’s why mapping a series of past market events, like mapping a glacier trail, is an exercise in futility if approached the wrong way.

In other words, we can look at the investing and trading greats to figure out how they made their piles -- and with the right mindset, that can prove to be a worthwhile exercise. But if the hope is to just copy them note for note, to invest in the same markets and the same exact opportunities they did, then the exercise is a waste of time. We can no longer walk an old market path than we can walk an old glacier path.

Though the path always changes, the wisdom stays the same.

Jesse Livermore has a great quote, which I do my best to paraphrase from memory here: “There is nothing new in markets. There can’t be, because speculation is as old as the hills.”

The lasting value of Livermore’s wisdom is testament to this. His book, Reminiscences of a Stock Operator, is widely acknowledged by top traders to be the greatest of all time. There’s no true rival to Reminiscences as far as trading books go -- the contest is for second place. The book is as useful and insightful today as it was 80-plus years ago. Technology has advanced dramatically; human nature, not so much.

It’s the same as far as glacier hiking goes. On a glacier, a new day means a new path. But the same tools, the same techniques, and the same wisdom still apply. It’s not like you need crampons one day and don’t need them the next, or need to step firmly one day and lightly the next. The key lessons endure.

That’s why it makes sense to study the masters and the legends and the old hands -- to learn the techniques that proved out their worth long ago, and still work to this day. The studying is worthwhile not because one hopes to find the same path, the same general conditions, or the same opportunities that past hikers did, which would be impossible; but rather because, as ever-changing as the path may be, we know that time-tested wisdom always stays the same.

Warm Regards,

JL