The Fog of War: Circumstances and Decisions

"War is the realm of uncertainty; three-quarters of the factors on which action in war is based are wrapped in a fog of greater or lesser uncertainty."

-General Carl von Clausewitz, Chief-of-Staff III Corps, Waterloo Campaign.

Serving on a destroyer in the early '90s, I learned and practiced the intricate dance of Anti-Submarine Warfare. Every decision, where to maneuver the ship, the placement of sonobuoys, and most importantly, where to send our helicopter, created a new bank of information and circumstances. From there, each decision led to another until you finally killed a submarine or they killed you. In many ways, the final decision to drop a torpedo in the water was hardly a decision at all compared to the dance preceding a strike.


In battle, it is easy to see the consequences of decisions. The stakes are high, life or death even, information is imperfect, decisions happen quickly, situations change, and circumstances evolve even more rapidly

I am reading Waterloo: The History of Four Days, Three Armies, and Three Battles by Bernard Cromwell about Napoleon's last stand against the Duke of Wellington. Ultimately, Wellington is triumphant over Napoleon, but Cromwell does an excellent job of highlighting the critical decisions, most of which were made early on in the days before the final battle, that significantly shaped the outcome. 

  

The same holds when it comes to success or failure in our life pursuits, whether in our careers, families, or personal investments. I have lived long enough to witness success and failure in many walks of life. In every case, it was like a battle, only drawn out over many years, sometimes even decades. In light of this comparison between battle and life, there are a few essential truths worth mentioning.

Information is never perfect. I tell people all of the time that I cannot predict the market. They nod their heads in understanding, and usually, the following words out of their mouth, "But what do you think is going to happen?" In submarine warfare, you are listening for your enemy in an environment (the ocean) that hides, bends, and bounces sound all over the place based on salinity, temperature, and depth. Sonar information is received in small snippets from various sources and usually is conflicting in some way, not unlike the stock market at all! We must accept that the whole picture will never present itself in all pursuits. 

Decisions must be made. Since we cannot predict the future, we must make do with the information available and make decisions. From the dark confines of the Combat Information Center on the USS John Rodgers, I was never entirely sure where the submarine could be. Based upon the limited information available, I had to make an educated guess and order a line of sonobuoys dropped from the sky. In investing, it is not uncommon for investors to freeze up in indecision. We want to ensure our success, yet success is never guaranteed. We must decide to apply for a job, save and invest, get married, have children, start a business, etc. All of these decisions entail risk and will significantly change the direction and trajectory of our lives, but they need to happen regardless. 

Bad decisions can be overcome. In anti-submarine warfare, the first line of sonobuoys and where they drop may define the battle but does not determine success or failure. The battlefield is constantly changing based on a litany of factors. The same holds for any decision, financial or otherwise. Decisions made upon imperfect information are not always right, but the circumstances are constantly changing. Changing circumstances create opportunities to still win despite a poor decision. Always be ready for change and ready to react. The Duke of Wellington famously attended a ball instead of marching the day he learned of Napoleon's forces crossing the river Sambre, to which he later famously remarked, "Napoleon has humbugged me, by God; he has gained twenty-four hours' march on me." Yet the circumstances changed, and through some luck and considerable effort, Wellington held off at Quatre Bras the next day. 

The odds are not as good as you may believe. Not what any of us want to hear, but it is very true. Submariners call surface combatants "targets" because they can see and hear a ship much easier than a ship can see or hear a submarine. When you have a good idea of your odds, it sharpens your focus. It is dangerous to go about battle or life with the attitude of "Don't worry, it will all work out just fine." Confidence is a good thing, but overconfidence leads to poor decision-making. Napoleon's defeat at Waterloo was due more to his overconfidence than anything else. It is not uncommon for couples to procrastinate saving for retirement because they think it will all work out, believing there is plenty of time to worry about that later. Business owners put off planning the transition of their businesses for the same reasons. Things turn out better when we take our success seriously and make intentional decisions to ensure a positive outcome.

I enjoy reading about battles, the decisions made, how those decisions changed the circumstances, and the decisions made upon new circumstances. Life is similar in many ways, just spread out over a more extended timeframe and a larger battlefield. To succeed, we must make the best decisions we can based on our limited information, then adjust, react, and move forward.