Bees may not be the first thing that comes to mind when thinking about investing, but their behavior holds valuable lessons for DIY investors. While bees may seem to operate in a Soviet or feudalist manner, their ability to balance exploitation and exploration is key to their survival.

The waggle dance, a form of communication used by bees to direct each other to resources, is a fascinating example of how bees work together. Surprisingly, about a fifth of the colony ignores these signals, opting for a random path instead. This seemingly inefficient behavior actually serves a purpose – it allows bees to explore new sources of food and locations for their colony, adapting to natural changes in their environment.

This explore-exploit trade-off is not unique to bees. It can be seen in various fields such as computer science, game design, and management. Businesses, like bees, must strike a balance between utilizing existing information and exploring new opportunities. Rory Sutherland emphasizes the importance of leaning towards exploration in a changing environment to avoid over-optimization and potential failure.

Even the Naskapi Innu people, through their divination rituals, showcase the value of embracing randomness for survival. By discarding collective memory and biases, they increase their chances of success in hunting and gathering.

In the world of investing, the concept of randomness is often overlooked. Investors prefer clear answers and metrics, making it challenging to discuss the value of uncertainty. However, allocating a portion of a portfolio to exploration can lead to significant rewards. Molten Ventures, an investment trust focusing on early-stage European technology companies, exemplifies this approach with successful investments in innovative startups.

While exploration can be rewarding in favorable market conditions, it also carries risks. Mike Ashley, known for his acquisition strategy with Frasers Group, demonstrates the importance of exploring new opportunities. Despite some moves being deemed as “hit and miss,” experimentation is necessary for growth and innovation.

Investors often struggle with the uncertainty of exploration, fearing the possibility of failure. However, like bees and Mike Ashley, embracing randomness and taking calculated risks can lead to unexpected successes. By finding a balance between exploitation and exploration, investors can navigate changing markets and maximize their returns.