Don’t Chase Bad Money With Good

It’s easy to get wrapped up in a bad deal. In poker, they call this following bad money with good. You have a pretty good hand, so you bet high to start. Suddenly you get a bad draw and your hand goes from pretty good to pretty bad. You start to think about how much you have riding on this hand. Can you just fold, and walk away? Oh man, that would sting. And so, you call the next guy’s big bet. Now you doubled your money in and are desperate to win. On a pretty bad hand. Your only hope is a prayer that you will get that one card that has about a 2% chance to draw.

You chased bad money with good

I took care of a middle-aged guy in the ER a few years back. He had a very common name; I’ll call him Mr. Smith. Mr. Smith came into the ER complaining of indigestion and it wasn’t getting better with antacids. He had chewed almost a whole bottle of TUMS in the past three days. He had had a very good run of good health until now. Hadn’t seen a doctor in a long time.

After asking him a few questions, he reported that getting up to walk up the stairs was getting more difficult. He would get winded easily. He didn’t like to lie down flat because he was worried that it would get worse. Unable to lie down and unable to get up and walk, I examined him sitting up straight in the bed.

In the middle of the examination, he was saying something and abruptly stopped. He fell back into the bed like a rock and went gray. I put it all together in an instant: this guy was having a heart attack. Much like the lady I hit with the defibrillator in residency, I called for the pads. I began chest compressions and in about 20 seconds he started breathing again. He didn’t regain consciousness. I put a breathing tube down his throat and began treatment for the heart attack. An EKG confirmed the diagnosis.

We made arrangements to get him to the big hospital that can do a catheterization, where they put a catheter through the wrist or groin up into the heart vessels, inject dye, and open up any narrowed blood vessels.

I followed him in the computer system. The cardiologists tried valiantly and put stents in to open up the vessels twice, but he died three days later. My treatment had failed.

To be honest, this kind of thing happens once a year or so in my experience. We do some kind of life-saving treatment only to find that it didn’t work. We cannot save everyone and so I accepted it and moved on. We never forget our patients, they just move to a place in the mind that we don’t think about frequently…until I saw his son three years later. 

I Met His Son:

I was at a college reunion and an old friend walked up to me. We talked about the old days for a while, then out of the blue, he told me that I was the one that took care of his Dad. I was stunned. The name was so common that I hadn’t put two and two together. I didn’t know what to say. He told me that he was grateful that I had saved his live.

I said, “But I didn’t.” He said, “You brought him back and I wasn’t there and you gave me three days to say goodbye to my Dad. Thank you. The cardiologists wanted to do more treatment for him, but his heart was failing. He never wanted to live in a nursing home or attached to machines; he would have been a burden. So he decided to stop the treatment.” Again, I was speechless. He said “Thank you,” again and walked away.

What a terrible thing to happen. I would have thought he would be upset with me for not being able to do more, or not doing something faster. No, he was grateful for those three extra days he could spend with his Father.

There are bigger things in this life than your investment, like spending time with your family. You never know when that sudden heart attack will hit. It’s hard to talk about, but the lesson is there. Mr. Smith knew he was dying, just not how long. He didn’t want to be a burden on his family. He knew that his doctors would do everything they could to keep him going, never mind the cost. Not just financially, but the cost of living hooked up to machines and tubes. He wanted to be awake and able to speak with his family in his final days. Aggressive uncertain treatment just wasn’t worth it.

A Bad Beat

It happens in our investments, too. We make a bad decision. We have a bad beat. And suddenly we are under water. That house we spend money on fixing up to flip just isn’t selling. Maybe it would sell better if we put in $5,000 worth of granite counter tops, or built that $25,000 garage add-on. Losing money on a deal is nothing like the loss of your Father, don’t get me wrong, but there is a lesson hidden there. Mr. Smith knew there would be a loss, he wanted to minimize it. He wanted to be with his family in his last days. He wanted to have them not spend money on futile treatments.

Before you spend that extra money on your investment, think about the likelihood that it will give you the return you are seeking. If not, cut your losses now, discount the price, and sell the place. It will sting, but you will look back on it as a learning experience. I recently lost $7,000 in a flip and it hurt. I’ll tell you about that later, but I continually added more and more to the rehab trying to sell that thing and finally I wised up. I was able to walk away with a bruise but it could have been much worse. Keep this in mind when investing. Keep this in mind in your life.