The Line of Least Resistance

"After a failed attack, never renew it along the same line… the line of least resistance is the only path to swift victory." — B.H. Liddell Hart

Military Context

Liddell Hart argued that repeating a failed attack along the same path is folly — the enemy has already read your strategy and reinforced against it.

The correct move is finding the line of least resistance: the path where defences are weakest or absent. Advancing along it lets you bypass fortified positions, disrupt the rear, and win at minimal cost.

The principle came from his own war experience. Liddell Hart was gassed at the Somme, witnessing first-hand the consequence of throwing hundreds of thousands of men repeatedly at the same fortified ground. His life's writing was in a sense a response to that experience — he set out to prove that frontal attrition was never necessary.

The Wall Street Translation

Many traders spend careers fighting the market: shorting strong stocks in a bull market because they seem expensive, buying weak stocks in a bear market because they seem cheap. That is a frontal assault on the market's fortified positions.

1. The Trend Is the Line of Least Resistance

• The power of momentum: when a stock breaks to an all-time high, there is no overhead supply — nobody bought higher and waits to break even. The defensive line does not exist and the path of least resistance is upward
• Avoiding value traps: a stock down for two years carries heavy overhead supply. On every rally, investors trapped at higher prices sell to get out, and that persistent wall of selling makes advances extremely difficult
• Follow sector rotation: if institutional money is flowing into defensives, do not fight it by buying growth

2. Why "Cheap" Is Often the Path of Greatest Resistance

This deserves expansion because it is counterintuitive.

A low price is not itself a reason to buy. A stock is usually cheap precisely because persistent selling pressure exists — and selling pressure is resistance. Buying it means choosing to attack where the defence is strongest.

This is the same thing as the value trap in The Little Book of Value Investing Chapter 2 elsewhere in this library, stated two ways: Browne defines it through business fundamentals (structural decline versus temporary setback), Liddell Hart through resistance structure — and both reach one judgment: cheapness must be accompanied by evidence that resistance is receding.

3. Overhead Supply as Observable Resistance

The line of least resistance is not a metaphor in trading; it can be approximately measured.

Volume-by-price distribution shows how much stock is held at each level. Heavy historical volume at a price means many holders share a cost basis near it — and when price returns there, a substantial portion will sell to escape.

That is the physical source of resistance, and why all-time highs are special: above a price at which nobody has ever traded, no trapped seller exists.

Actionable Trading Rules

1. Trade only with the trend: use long-term moving averages to identify direction; do not buy below the long-term average or short above it.
2. Do not fear buying all-time highs: a new high means zero overhead supply and resistance has vanished — counterintuitive against "chasing is dangerous," yet a direct consequence of resistance structure.
3. Do not fight monetary policy: central banks control the ultimate path of liquidity, and in a tightening cycle the market's least-resistance path is usually downward.

Relevance to a Retirement Portfolio

For retirees the most valuable application is not stock selection but understanding why you should not fight your own plan.

An allocation already written down and matched to your age and needs is your personal financial line of least resistance. Every deviation driven by market sentiment — trimming during declines, adding during euphoria — is a frontal assault on your own fortified position.

Periodic rebalancing is exactly movement along the line of least resistance: it asks you to judge no direction and defeat no one, only to return to the path you already established.