First the story. Daedalus, father of Icarus, hatched a plan for the two of them to escape from their exile on Crete. Let me simplify my life and quote from the Wikipedia account: “Daedalus fashioned two pairs of wings out of wax and feathers for himself and his son. Before they took off from the island, Daedalus warned his son not to fly too close to the sun, nor too close to the sea. Overcome by the giddiness that flying lent him, Icarus soared through the sky curiously, but in the process he came too close to the sun, which melted the wax. Icarus kept flapping his wings but soon realized that he had no feathers left and that he was only flapping his bare arms. And so, Icarus fell into the sea. . . .”
One of the benefits of reviewing financial books is that the process can serve as a personal sounding board. I sometimes listen to myself saying “that lacks imagination,” “that’s at best a C+,” “surely you can fly higher than that.” And, as I think through my gut reactions, I realize that I’m something of an intellectual Icarus. When I undertake a challenging project I want to get as close to the sun as possible without crashing and burning. If I don’t feel the heat of the sun’s rays, I tend to throw myself into the sea. (Note that in my version the sun in no way causes my death; I commit intellectual suicide.) Well, that’s not good, and I’m working on lowering expectations. Sometimes for a classic academic overachiever a B+ has to be good enough.
My version of the Icarus complex is idiosyncratic, though it reflects the general principle that the greater the gap between an idealized goal and reality, the greater the likelihood of failure. On one level this is painfully obvious. A trader or investor has a much better chance of achieving an annualized rate of return of 5% than 50%. But how many people set such a modest goal for themselves? It hardly seems worth the effort.
In my search for material on the Icarus complex I encountered Denis Waitley, an author and motivational speaker (and, as you know, I’m not a big fan of the self-help crowd so this is in no way an endorsement of anything, but I’ll take decent ideas wherever I find them). He wrote: “The Icarus complex describes many individuals as they naively and prematurely jump into the action phase of their success program. They set their sights far too high, are unrealistic in their plans, do not have the necessary knowledge base or training skills, and, like Icarus, they get burned. . . . The Icarus complex explains why so many people have ‘permanent potential.’ They almost succeed over and over, having temporary, fleeting gains, and then come crashing down to earth.”
The trick is to set a goal that requires stretching, not soaring. Though after years of Yoga exercises with a body as inflexible as it ever was, stretching and soaring sometimes don’t seem all that different. But the intellectual metaphor can still remain intact. It means setting a goal that is well within the Bell curve of possibilities, a goal that provides a constant source of challenge and, alas, frustration as well. But, pursued properly, it also means never getting anywhere close to the risk of ruin.
Stay tuned. I have a set a challenging goal for myself.