Are you out there all alone -- reading what you can, but making your own decisions? Maybe it's time to make a change.
Great partnerships always seem to bring the best of opposing worlds together, whether it's Lennon and McCartney, Morecambe and Wise, Rolls and Royce or Warren Buffett and Charlie Munger. Very often, such partnerships aren't easy. Tensions are inevitable as, to complement one another, opposing viewpoints and forces are needed -- that's what happens when left-brained and right-brained people are brought together.
It's said that music is an excellent way of learning in that both the left and right brain have to work together in harmony. And for investors to make sweet music, the same principle should hold true.
Left brain, right brain?
After all, we're only sophisticated primates after all -- and are all subject to the same evolutionary behaviour patterns. So if you can balance logic and instinct, rationale with creativity, left brain and right brain, yin and yang, or whatever you want to call it, you'll become a better investor in my opinion.
And opinion this is. Not everyone agrees by any means, and there have been many great investors who've operated much more from one side of the fence than the other. The approach of "just look at the numbers, nothing else matters" has merit, but instinctive investors often make their best decisions without being able to explain why in any logical way.
Creating a perfect balance
The problem many of us have as individual investors is in creating the right balance. I think the idea of a partnership works better in practice -- even if it's uncomfortable. But it's quite hard to achieve this. There's sometimes a fine line between constructive debate and sheer argument. But even the latter is better than no opposing judgement whatsoever.
So, for example, if you know you tend towards more right-brained thought, using your gut instincts to make decisions, or basing your investment case on wide open sweeping decisions about the future in some way, then perhaps you need some cold hard, detached logic to cool your ardour a little.
Conversely, if you're a pure numbers person, uninterested in the "emotional intelligence" of the market, cynical about the next big thing, and a curmudgeonly value hunter by nature -- maybe you need a little more excitement in your investing life from someone who isn't quite as keen as you are on six acres of brownfield in Rochdale hidden in the balance sheet.
Find a friend
My advice is to find a way of making this happen -- even if it's uncomfortable to do so. You need someone who'll present the opposing case coherently. And when you're both in accord, you may really have found something.
In practice, this could be one person all the time or different horses for courses. Investors can fall into the trap of thinking in straight lines, following tried and tested formulae which appear to work but take no account of wider changes.
As Peter Lynch points out so effectively in "One Up On Wall Street" the best stock-pickers in reality are ordinary people with an ear to the ground. So sometimes, there's a great benefit in explaining your investment case to someone completely unversed in the markets. If you can't explain the reasons in layman's terms relatively easily, this could well indicate a problem in your analysis.
The Fool's bulletin boards are an excellent way of building a dialogue with chosen people as you can elect to "E-Mail this Reply to the Author". In this way, you may be able to strike up a partnership with someone who doesn't share your views -- and there's great value in that.
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