Tend to Your Crops: The Myth of Passive Investing

I heard a segment on Bloomberg recently about how the commercial real estate unwind is hitting even the part of the market that was supposed to be “safe.” Buyers of AAA-rated commercial mortgage-backed securities are taking losses for the first time since the Great Financial Crisis.

That matters.

Not just because it’s a problem for one corner of the credit markets, but because it’s another reminder that “safe” is often just a story people tell themselves right up until reality interrupts it.

I think there are two obvious takeaways here.

The pandemic didn’t just create a temporary disruption in work habits. It accelerated a structural change that was already possible, and once people experienced it, a huge percentage of them didn’t want to go back.

Remote work stopped being a contingency plan and became, for many workers and employers, a preferred model. Hybrid work did the same.

That meant office occupancy wasn’t coming back to prior norms in any clean, symmetrical way. And if office occupancy wasn’t coming back, then the downstream consequences for office valuations, refinancing, debt service, and the securities built on top of those cash flows were not exactly hard to imagine.

This wasn’t black swan territory. It wasn’t some unforeseeable lightning strike. It was a slow-moving problem that was visible in plain sight.

By mid-2023, it should have been obvious to anyone willing to look that the old assumptions about office demand were broken. Maybe not permanently in every city, every building, every submarket. But broken enough that the risk was no longer theoretical.

The people who got hurt weren’t blindsided so much as they were complacent.

A lot of investors kept hoping the old world would simply reassert itself. They wanted “back to normal.” But markets don’t care what people want. They care what is.

There’s a line from Neil Peart: “Changes aren’t permanent, but change is.” That applies to investing as much as anything else.

For decades, people have repeated the same formulas about what is “always” safe, what “always” goes up, what is a “real” store of value, and what you can supposedly count on through thick and thin.

Real estate has been one of the biggest examples.

We’re told it’s tangible, durable, foundational. We’re told that land is finite, buildings are real, and therefore the asset class itself carries some kind of built-in permanence.

But that’s never really been true.

Real estate is not one thing. A Class A office tower in a downtown corridor is not the same as:

Even within one broad asset class, the difference between “valuable” and “value trap” can be massive.

And that’s before you even get to financing structure, rate sensitivity, vacancy risk, rollover risk, local politics, insurance costs, demographic shifts, or technological change.

The deeper mistake is believing that any asset is untouchable.

It isn’t true of commercial real estate.
It isn’t true of gold.
It isn’t true of Bitcoin.
It isn’t true of banks.
It isn’t true of blue chips.
It isn’t true of government bonds in every environment.
And it certainly isn’t true of financial products wrapped in a AAA label.

Lehman looked solid until it didn’t. Washington Mutual looked solid until it didn’t. SVB looked solid until it didn’t.

That’s the pattern.

People confuse familiarity with safety, size with strength, and reputation with permanence.

This gets to two bigger points, not just about investing, but about life in general.

I understand the appeal of passive investing. It sounds civilized. Rational. Efficient. Put your money to work, tune out the noise, let time and compounding do the heavy lifting.

And sometimes, in broad strokes, that works well enough.

But “passive” has become less of a strategy and more of an excuse for disengagement. People use it to justify not thinking, not watching, not learning, and not adapting.

That’s where the problem starts.

Anything worth investing in is worth tending.

If you plant a field, you don’t just walk away and assume nature will handle the rest. You watch the weather. You watch the soil. You watch for pests, blight, drought, flood, and changing conditions. You intervene when you need to.

You don’t micromanage every second, but you also don’t pretend that neglect is wisdom.

Investing is no different.

Your capital needs oversight.

Not panic.
Not constant twitching.
Not impulsive trading.

But oversight. Attention. Maintenance. Stewardship.

That doesn’t mean every investor needs to become a day trader. It means you shouldn’t confuse inactivity with discipline.

There’s a difference between patience and neglect.

There’s a difference between having a long-term plan and refusing to acknowledge when the underlying facts have changed.

Sometimes the best move is to hold. Sometimes it’s to reduce exposure. Sometimes it’s to rotate. Sometimes it’s to hedge. Sometimes it’s simply to admit that the thesis no longer holds.

But none of that is possible if you’ve mentally outsourced responsibility for your own capital.

A lot of people put resilience on a pedestal. And to be fair, resilience matters. Grit matters. The ability to absorb setbacks and keep going matters.

But adaptability comes first.

If you’re paying attention early, if you’re willing to question your assumptions, and if you’re willing to change course when the evidence changes, you can avoid a lot of the damage that other people later have to be resilient enough to survive.

In other words, resilience is often what you need after refusing to adapt.

Adaptability is what keeps small problems from becoming catastrophic ones.

The investors who do best over time are not necessarily the ones with the most conviction. They’re often the ones with the clearest eyes. The ones who can separate narrative from reality. The ones who don’t fall in love with an asset, a framework, or a label.

The ones who can say, “This worked, until it didn’t,” and then move on without treating that as some kind of identity crisis.

Markets punish rigidity. They punish people who need yesterday’s story to still be true.

The same principle applies to business, relationships, health, career, and personal growth.

You can’t just set your life on autopilot and assume the conditions that existed when you made your original plan will still be there five or ten years later.

The landscape changes.
Technology changes.
Culture changes.
Incentives change.
You change.

The people who thrive are rarely the ones who found a formula and froze it in amber. They’re the ones who remain engaged. They observe. They update. They course-correct.

That doesn’t mean chasing every new thing.

It means staying awake.

We live in a world that is always moving. Sometimes slowly enough that people mistake it for stability. Sometimes violently enough that nobody can ignore it.

But either way, standing still is not neutral. In practice, it usually means falling behind.

So yes, this commercial real estate mess is about office buildings, credit markets, and misplaced confidence in AAA paper. But it’s also about something bigger.

It’s about the danger of assuming that anything can be safely ignored forever.
It’s about the cost of confusing passivity with wisdom.
It’s about the fact that every investment thesis has a shelf life unless reality keeps renewing it.

Tend to your crops.

Pay attention to what you own and why you own it. Reevaluate when the facts change. Stay flexible. Don’t outsource your thinking. Don’t cling to permanence where none exists.

In markets, as in life, the people who stay awake and adapt usually do a lot better than the ones who just hope the weather holds.