A Little Perspective

Guest columnist Whitney Tilson recently visited Ethiopia, where he saw startling human poverty and adversity firsthand. Away from cell phones and stock quotes, he came away with a renewed appreciation for his good fortune.

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By Whitney Tilson
April 17, 2001

I live, eat, and breathe investing, in part because it's my job, but mostly because I love it. Even when I'm on vacation, I typically have a cell phone and laptop with me and I'm regularly checking the market and keeping abreast of developments -- often to the annoyance of my family.

Thus it was an unusual experience for me to disconnect from the stock market for the past two weeks and visit my parents, who live in Ethiopia. Tonight, I'd like to share a few stories from my trip and how it has affected my perspective on investing.

In the span of a day, I went from my parents' home in the Ethiopian capital of Addis Ababa to my home on the Upper East Side of Manhattan. I lived in Tanzania and Nicaragua for a good part of my childhood, so I've seen third-world countries, but it was still a striking, sobering contrast. I probably don't need to tell you much about the Upper East Side -- overpriced stores, luxury apartments, and the highest income census tract in the United States, with an average income of over $300,000 annually -- so let me instead tell you about Ethiopia.

I really enjoyed the country, which has friendly, proud people, a wonderful climate, and a fascinating history. It used to be the kingdom of Abyssinia and is the only African country never colonized. Yet Ethiopia is desperately poor, with average annual per capita income just above $100, among the lowest in the world. Roughly speaking, the average American earns in one day what the average Ethiopian earns in an entire year.

Such poverty means that Ethiopians are subject to famine, diseases, and other misfortunes unheard of in developed countries. Remember "Do They Know It's Christmas?" and "We Are the World" in 1984 and 1985?  Those pop-star fundraising crusades came about because of terrible famines in which hundreds of thousands of Ethiopians perished.

Income per capita is a pretty dry number, so let me give you some examples of what real poverty is all about.

Dereje is 19 years old and works full-time for my parents, caring for their horses, accompanying them riding a few times a week, and doing other miscellaneous tasks. He's handsome, intelligent, athletic, and has a warm and compelling personality. Kids, mine included, love him.

He lives in the tack room at the stable, not because my parents require him to but because it's better than the single small room in a dilapidated hut the other six members of his family share. Until my parents found his brother a similar job, Dereje was supporting his entire family on the salary he earned from my parents, which is 50% higher than the going rate for this type of work.

So take a guess at how much Dereje earns. Nope, lower. How about $44. Not per day, not per week, but per month. The cost of living in Ethiopia is low -- a bottle of Coke, for example, costs 20 cents -- but seven adults living on $1.50 per day is tough no matter where you are. Yet Dereje considers himself fortunate, and he is, especially compared with the people I met at two charities my parents support, the Cheshire Home and the Fistula Hospital.

Cheshire Home
When was the last time you saw someone crippled by polio? Probably never, as an inexpensive vaccine has eliminated it in the developed world. But in Ethiopia, many awful diseases such as polio -- which strikes children and generally causes terrible deformities -- are still common. With few people able to afford wheelchairs, Ethiopia's polio victims have to pull themselves along the ground in crablike fashion. When even healthy people struggle to survive, imagine how hard life must be for those crippled by polio.

The Cheshire Home helps polio-stricken children walk again, albeit with special braces and crutches. It's a long and painful process, usually involving multiple rounds of surgery in which doctors cut tendons in the children's legs so they can be straightened. Between surgeries, the legs have to be in full-length casts so they don't curl up again.

I've posted a Web page with eight pictures of the Cheshire Home. (Dereje is in the first picture.) Look at those kids' legs, yet also at their faces. It'll make you cry and smile simultaneously.

Fistula Hospital
Life in Ethiopia is very hard for most everyone, but it's especially hard on the women. Like women in most of the developing world, they tend to do the most difficult, dirty work, yet generally do not have access to the few opportunities that exist for an education and a good job. Many are married off at a young age -- sometimes as young as 10 -- and often start bearing children by their early teens. Childbirth rarely occurs with a qualified attendant, much less at a hospital. If there's a problem during delivery, common given the lack of prenatal care, the babies often die and the mothers can suffer injuries.

A common injury is called an obstetrical fistula, which occurs when the baby tears a hole into the bladder and/or rectum, causing the mother to become permanently incontinent and constantly smelly. When this happens, the husband almost always abandons his wife, who returns to her family, often to be rejected again. These women have lives of unspeakable misery. One didn't leave her bed, much less her family's hut, for nine years before making her way to the Fistula Hospital.

The hospital specializes in the relatively simple surgical procedure that repairs the fistulas, allowing the patients to return to normal life and even bear children again. It heals more than 1,000 women annually, at a total cost of a mere $400,000 -- a pittance by Western standards, but a fortune in Ethiopia.

Changed perspective
The last two weeks affected my perspective on investing in two ways. First, simply being away, unable to constantly check my portfolio and receive news and messages, was strange -- but good for me. Given my passion for investing, I find that it's easy to get caught up in the day-to-day gyrations of the market, which can affect my mood and judgment. (Based on the dozens of emails I receive weekly from readers, I know that I'm not alone in this regard.)

This isn't healthy. The last thing I need is more stress, and it's likely to hurt my investment performance as well. As I've written many times in the past, one of the keys to successful investing is tuning out short-term noise. I don't believe it's a coincidence that Warren Buffett has built the greatest investment track record in history from Omaha, which is about as far away from the foolishness of Wall Street as one can get in this country.

The last two weeks have also given me -- how do I say this without sounding corny or trite? -- a greater appreciation for how damn lucky I am. After seeing the tremendous hardship and obstacles facing Dereje, the children of the Cheshire Home, and the young women of the Fistula Hospital, I more than ever thank my lucky stars that I was born in the richest country in the world and have been fortunate enough to accumulate long-term assets to invest.

-- Whitney Tilson

Guest columnist Whitney Tilson is Managing Partner of Tilson Capital Partners, LLC, a New York City-based money management firm. Mr. Tilson appreciates your feedback at To read his previous columns for The Motley Fool and other writings, visit