Posts filed under “Philosophy”

Being A Long Term Investor in a Short Term World

time-warpIts Friday, and today is the day I usually like to wax philosophical about a variety of things. It seems this week we have done a good deal of that already (see this and this). Given those posts, let’s briefly discuss the issues investors have with the artificial construct we call Time.

What’s that you say? You believe Time is real?!

It sort of isn’t. We can attempt to define it as a 4th dimension (after 3 dimensional space: X, Y & Z). We can claim it is a measure of duration, or merely an illusion as perceived by mankind. For example, the International System of Units (SI) has defined one second as “the duration of 9192631770 cycles of radiation corresponding to the transition between two energy levels of the caesium-133 atom.”

Sure it is.

Rather than getting too lost in the weeds, lets discuss what Time means to investors.

Humans experience Time in the here & now — the intersection of what our faulty memories recall of the past, and what our optimistic expectations and hopes are for the future. Consciousness brings with it an awareness of the current moment, with the past providing a form of context and the future creating a possible path.

But human Time awareness is fraught with all manners of bias and cognitive perception errors. Given how you humans experience Time, your general mindfulness of all that is going on around you, there exists a heavy bias to the Church of What Is Happening Now. I call it the Recency Effect, but there are lots of other names for this phenomena.

Hence, your tendency to put excess emphasis on short term noise. The focus on the most recent data point in a series over the longer term trend. Minute slices of news matters much more than does the big picture. There is a preference for action over patience, an inability to do, well, nothing (Don’t just do something, sit there).

Investing is really about imagining your future self  — when you are older, working less or not at all, earning much less money. Paying for your retirement or your kids (or latter generations) educations. What the future you will have in terms of assets.

The ability to think far into the future — years and decades — is not something that comes easy. But it is essential in order to be a successful investor.

Before making your next investing move or trade, ask yourself this question: How will this change look to future me 20 years hence?


Category: Investing, Philosophy, Psychology

Yay! Its a No-NFP Non Farm Payrolls Friday !

Okay, so here is the deal: We have no report of the NFP data today. The net impact of this? Nothing. Total loss to the investment community? Nada. Actual impact to the economy? Zilch. There are two things we need to understand about this report: The first is what makes it significant; the second is…Read More

Category: Employment, Philosophy

An Illustrated Book of Bad Arguments

Click for full book Source: Book of Bad Arguments   I deal with bad arguments all the time, constantly swatting away silly arguments and foolish rhetoric. This little book does a nice job summarizing them all.  

Category: Philosophy, Really, really bad calls

Whats Your Forecast?

Its Philosophy Friday, and I want to discuss in broad terms the same interesting conversation that keeps coming up: Over the past few weeks, I keep getting that question: Whats your forecast for the economy? Where will interest rates be at the end of the year? Are Jobs going to improve? And of course, the big…Read More

Category: Apprenticed Investor, Philosophy, Really, really bad calls

W. Edwards Deming: 14 Points for Management

“Long-term commitment to new learning and new philosophy is required of any management that seeks transformation. The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment.” -W. Edwards Deming Dr. Deming’s Ideas Dr. Deming’s famous 14 Points, originally presented in Out of the Crisis, serve as management guidelines. The…Read More

Category: Corporate Management, Philosophy

Outcome or Process Oriented?

Well, that was a busy week, wasn’t it? The non-Taper, the Lehman anniversary, oh, and our little launch has kept your humble author rather busy. Since its Friday, the day I like to get all philosophical on y’all, let’s reflect on a simple issue: What is more important to investors, their process or their results?…Read More

Category: Investing, Markets, Philosophy

Greatest Resignation Letter Ever

This was awesome: Dear Barton: You have a man in your employ that I have thought for a long time should be fired. I refer to Sherwood Anderson. He is a fellow of a good deal of ability, but for a long time I have been convinced that his heart is not in his work….Read More

Category: Employment, Philosophy

Loose Items

I am going to skip the my usual Friday Philosophy as this week has been enormously insane for me, out late for work every night, with lots of meetings every day (and tonight is another holiday). But I do have a few things I want to discuss/tease/show you: • There are still a few tickets left…Read More

Category: Markets, Philosophy

The Big Picture Conference: Scheduled Speakers

I am thrilled to tell you about the 5th Annual Big Picture Conference coming up on October 8th in New York City. We are extremely excited about the speakers, topics, even the venue itself. And, we are expecting our largest audience yet. I wanted to personally invite you as a reader of the Big Picture to what we…Read More

Category: Investing, Philosophy, Psychology

Simplify Your Future

Want more from your career and life? Live by this single sentence. Based on the free eBook of the same name: Simplify Your Future from Bruce Kasanoff by Bruce Kasanoff on Aug 01, 2013

Category: Digital Media, Philosophy, Think Tank