Multiple perspectives = Bigger AND better context! What this “windows” concept teaches about good investing! [Wednesdays: The Independent Investor]
Miles Everson’s Business Builder Daily speaks to the heart of what great marketers, business leaders, and other professionals need to succeed in advertising, communications, managing their investments, career strategy, and more.
A Note from Miles Everson:
Welcome to today’s edition of “The Independent Investor!”
How are you this mid-week? We hope you’re having a great day so far.
Every Wednesday, we publish articles related to investing. Our goal is to help you strategically think about your financial decisions through the tips, insights, and coaching comments that we share.
For today, we’ll talk about the importance of having multiple perspectives as an investor.
Continue reading below to find out the power of looking at a situation through different points of view.
The Independent Investor
Do you remember the 3 points of view (POVs) discussed in your English classes?
- 1st person POV (I, me, my, mine, we, us, our, ours, myself, ourselves)
- 2nd person POV (You, your, yours, yourself)
- 3rd person POV (She, her, he, him, they, them, herself, hers, himself, his, themselves, their, theirs)
In writing or storytelling, a story changes depending on who’s telling it… and these points of view help you determine how to make your story come to life.
Simply said, point of view isn’t just an element in storytelling. It’s also a foundation for a captivating story.
The Power of Point of View
Did you know point of view applies to many other things aside from writing and storytelling?
It is also synonymous with the word, “perspective” and is applicable even to the world of technology and finance.
Allow us to share with you an example…
Alan Curtis Kay is an American computer scientist best known for contributing the “windows” concept to personal computing. This refers to the idea that you can have multiple points of view open at the same time with a graphic user interface.
Photo from Blog Think Big
As one of the pioneers of the computer industry, Kay worked at the Xerox Palo Alto Research Center (PARC). Lots of amazing discoveries and inventions happened there—from Ethernet to laser printing.
With all the advanced technology that we have today, we can thank Kay for the convenience of not having to shut off one app, tab, or window every time we open another.
It’s because of him that we can now open and overlap multiple apps or tabs at the same time!
In all of these developments, Kay understood the importance of looking at things from different points of view. As one of his famous quotes said:
“Point of view is worth 80 IQ points.”
What does this mean?
The RIGHT perspective on a particular situation can give you a new and improved understanding of the world.
Finding the Power of Point of View in Investing
Does Kay’s brilliant concept extend to the financial markets too?
Think about this: The wrong perspective can lead you to making poor investment decisions.
Professor Joel Litman, Chairman and CEO of Valens Research and Chief Investment Strategist of Altimetry Financial Research, often brings up the mainstream media’s sensationalist headlines whenever he talks about bad investing advice or perspective.
According to him, the media purposely finds poor perspectives for examining market movements. Why?
The “right” point of view isn’t newsworthy most of the time!
Try tuning in to financial news today. If you simply listen to it and not do your research, you’d think we’re experiencing one of the worst bear markets ever.
That’s why you have to tap on the power of point of view in investing. By looking at the financial market’s situation through someone else’s perspective, you’ll gain a better understanding of the investment world.
Professor Litman agrees bad decisions come from having preconceived points of view… and in the world of investing, some investors are making bad calls because they’re selecting data to back up their opinions, not the other way around.
This is called “confirmation bias,” which we also talked about in a past “The Independent Investor” article.
There are lots of talks right now about the stock market’s doom. The headlines would have you believe things are already bad, and would even get terrible.
In times like this, you need to take Kay’s advice about widening your viewing aperture or point of view. Don’t let the news scare you into panic selling!
Sure, the past few years haven’t been good for many investors’ portfolios. Despite that, try to look at your brokerage statements from a new perspective.
Review more sources over a longer time frame and use all the tools at your disposal. These will help you gain knowledge to beat the market.
Besides, by widening your point of view, you add 80 IQ points’ worth of perspective to your investing arsenal.
The bottom line?
Don’t get caught up in the media’s bias towards day-to-day market fluctuations!
Instead, look at the bigger investing picture through a long-term lens. This will help you resist the big emotional swings the media tries to feed you.
(This article is from The Business Builder Daily, a newsletter by The I Institute in collaboration with MBO Partners.)
About The Dynamic Marketing Communiqué’s
“Wednesdays: The Independent Investor”
To best understand a firm, it makes sense to know its underlying earning power.
In two of the greatest books ever written on investing, the “Intelligent Investor” by Benjamin Graham and “Security Analysis” by David Dodd and Benjamin Graham (yes, Graham authored both of these books), the term “earning power” is mentioned hundreds of times.
Despite that, it’s surprising how earning power is mentioned seldomly in literature on business strategy. If the goal of a business is wealth creation, then the performance metrics must include the earning power concept.
Every Wednesday, we’ll publish investing tips and insights in accordance with the practices of some of the world’s greatest investors.
We make certain that these articles help you identify and separate the best companies from the worst, and develop your investing prowess in the long run.
To help you get on that path towards the greatest value creation in investing.
Hope you’ve found this week’s insights interesting and helpful.
Stay tuned for next Wednesday’s “The Independent Investor!”
Head of Marketing
Valens Dynamic Marketing Capabilities
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