Be sure to look beyond your investment bubbl
The internet is an amazing t h i n g − whate v e r y o u r passion, you’ll be able to find l i ke-minded people f rom around the world to share it with. So if you only collect stamps with steam trains on them, you’ll find like-minded people from around the world, but you’ll never meet the person living next door who only collects stamps with semi-precious stones on them. In the world of stamp collecting, this is not a concern, but in the world of investing it most definitely would be a problem.
The problem is that we become so immersed in our bubble and become so blinkered that we can miss significant things that sit outside of our belief system.
One of t he most i mportant, yet hardest, things we need to do in life and in investing is to f ind people who disagree with us. The problem with the vastness of the internet is that I need never hear a single comment f rom somebody who doesn’t agree with me.
On Twitter, for example, I can ensure that I only follow people who say things that I agree with; I can block those who disagree. I can make sure that I only read articles that support my i nvesting view while i gnoring everybody else’s views. Ultimately, I am living in my bubble and pretending nothing else exists or matters, but the world outside of my bubble does exist and it does matter.
IT MATTERS VERY MUCH.
money at that moment, but when we invest for decades a rising price that may only last a few months or a year or two is of little use.
I follow people on Twitter who I think are crazy, people whose advice I would never take in a million years. In fact, I actually take it a step further: I ask them to always send me articles t hat I will disagree with, I want them to keep me on my toes. I want them to keep me thinking, thinking about things that I don’t agree with. Otherwise I get stuck in my comfort zone, believe everything I say and think and, before I know it, I’ l l get taken out by the market because I’ve missed the big picture.
An example i s f rom my recent column on the ‘sell in May’ theory (Pay no attention to May doomsayers, 15 May21 May issue). Every year it pops up and I dismiss it. But a few people will t weet me some ‘evidence’ that I read and that then forces me to go off and f ind the other side of the evidence. Of course I then decide the ‘sell in May’ thing is silly. But I need to keep on testing it.
So, f irstly, start reading things you don’t agree with. Find some people to read and/or follow whom you think are totally wrong. Read what t hey have to say, consider it and continually critique yourself, your strategy and your investments. We can never buy a share or decide on a worldview and sit back thinking all the hard work has been done. There is still lots of work that we continually need to do, not only to keep ourselves sharp, but to consistently check we’re right.
Secondly, be prepared to change your mind, in a sense admit that you were wrong. This is usually painful, but if you’re wrong, sticking to a wrong strategy would be truly painful.
This process of always i nviting i n t houghts you disagree with i s ongoing, and changing your thinking is also ongoing, albeit generally a slow process. But better slow than never.