What Grace Slick Can Teach You About Investing

"And if you go chasing rabbits
And you know you're going to fall,
Tell 'em a hookah-smoking caterpillar
Has given you the call.
Call AliceWhen she was just small. ...

When logic and proportion
Have fallen sloppy dead,
And the White Knight is talking backwards
And the Red Queen's off with her head,
Remember what the dormouse said:
'Feed your head,
Feed your head.'"

-- Grace Slick and The Jefferson Airplane, White Rabbit

It was breakfast time at roughly this hour 47 years ago today when I was at Woodstock, although there was no food available at Max Yasgur's farm in Bethel, N.Y.

After The Who had bellowed out a Woodstock record of 25 songs, the mellifluous Grace Slick and The Jefferson Airplane sang White Rabbit to thunderous applause. A few hours earlier, I was so tired that I actually fell asleep on our blanket during Creedence Clearwater Revival's set after they sang Bad Moon Rising. I missed hearing the rest of their performance, but I awoke at about 2:30 a.m. to Janis Joplin's forceful rendition ofSummertime, and I managed to stay up the rest of the night.

Sly and the Family Stone later took us higher, and then The Who played all of Tommy. And then about 8 a.m., it was Grace Slick's time to shine with The Jefferson Airplane.

Morning Maniac Music

The "Chrome Nun," as David Crosby had nicknamed her, rocked the farm that morning. Slick introduced her set by saying that the audience should get ready for some "morning maniac music."

To me, her song White Rabbit (along Crosby, Stills & Nash's Suite: Judy Blue Eyes and Jimi Hendrix's Hey Joe) were the festival's highlights. When White Rabbit was over, my girlfriend (a true "psychedelic urchin") cried in an emotional response.

Chasing White Rabbits

Now, as many subscribers know by now, I find investment lessons in the oddest of places -- even in Grace Slick's White Rabbit.

My girlfriend's response sort of reminds me of my take on today's market. I've "cried" more than once over stocks -- at times being short on high-beta, high-short-interest names. And today's investors and traders seem increasingly to be chasing their own "white rabbits," affectionately called F.O.M.O. (for "Fear of Missing Out") and "T.I.N.A. ("There Is No Alternative" to stocks).

When an interviewer asked Slick years later whether White Rabbit encouraged kids to take drugs, she explained that the song was meant for parents. The musician said she wanted to point out the hypocrisy of parents reading their kids books like Alice's Adventures in Wonderland and Through The Looking-Glass, which cast drugs in a favorable light.

Hmm ... it's kind of like hypocrisy of value investors who chase price momentum and buy high-multiple stocks, right? Or you might compare this to our current addiction to low interest rates and central-bank "cow bell."

The Solution: Feed Your Head

Slick also said in interviews that many had misinterpreted White Rabbit's line "Feed your head." She said this wasn't a call for drug use, but that people should gather as much information as possible through reading books.

Now, this reminds me of something that Warren Buffett said at the 2013 annual shareholder meeting of Berkshire Hathaway (BRK.A) , (BRK.B) . I was in attendance at this famous "Woodstock for Capitalists" when an audience member asked Buffett about what investment books he read. Here's what "The Oracle of Omaha" said in response:

"I read every book in the public library on investing by age 11. ... We read for the enjoyment of it; it's been enormously beneficial to us, but we read because it's fun. My life would have been different if [legendary value investor Ben Graham] hadn't gone to the trouble of writing [a] book, which he didn't need the money from."

The Bottom Line

I'd like to conclude today's opening missive by repeating the final lines of White Rabbit:

"When logic and proportion
Have fallen sloppy dead,
And the White Knight is talking backwards
And the Red Queen's off with her head,
Remember what the dormouse said:
'Feed your head,
Feed your head.'"

I'd suggest that you think hard about these words before adding to your long investments over the near term.