Multiple Points of View

We all have different jobs in different companies in different industries. But there’s a common thread among most people’s jobs. They’re in the business of trying to figure out what people want and where the world is heading next.

Which is hard. Everyone is biased to their own history, so trying to figure out what other people want can be frustrating and confusing.

If you grew up during a war, or during a period of high inflation, or in a family with little (or lots) of money, you’ll have a hard time fully relating to people who didn’t grow up with those things. If you’ve worked on commission, or work from home, or own your business, you’ll see the world through a different lens than people who haven’t.

Which goes to show how important diversity is in business. You’ll get closer to figuring out what people want by understanding the opinions and viewpoints of as many different people who have seen the world through as many different lenses as possible.

I’ve had a small taste of this in a career that’s given me two distinct points of view on the world of investing.

The first is as an investment writer.

Writers and journalists are sideline spectators. But they’re also free from the shackles of incentives that cause actual investors to believe a long list of crazy things that justify their salaries.

As a writer, I didn’t have to advocate any particular strategy or product, because I had no clients to appease. I had nothing to sell, no quotas to meet. Journalism is devoid of real-world experience, but also devoid of the natural biases from come from real-world pressures. This lets you look at investing in an objective way, which helps identify a lot of the bad behaviors that cause investors to go astray.

Poorly timed buy-and-sell decisions.

Panicked emotions.

Short-term thinking.

Writers can easily spot other people committing these flaws and call them out.

Investing is the intersection of $200 trillion, emotions, and hard-to-define fees, which means conflicts abound. Self-interest is the most powerful force in the world, and good people can believe some astoundingly bad things when their salary depends on it. Journalists have the least real-world investing experience, but also the fewest direct conflicts of anyone in the business. As a result, writers and journalists see many professional investors as behaviorally flawed salesmen. That’s what they see, from their point of view. The investment world is filled with bad decisions, and journalists have one of the best perches to identify and call out those flaws when they see them.

That’s one point of view.

The second is as an investor, both in the wealth management department at a former employer and now here at the Collaborative Fund. One thing sticks out: The decisions that writers and journalists can’t understand as outsiders make a lot more sense to insiders.

It is one thing to design and describe a perfect investment solution on paper. It’s another thing to get real people to adhere to it, so the gap between what works on paper and what works in people’s brains can be miles across.

A blogger can write, “Avoid expensive stocks.” Easy advice! But to a mutual fund manager who comes to work Monday morning with $10 million of new customer inflows and a mandate to buy, say, U.S. small caps, it’s easier said than done. “Take the long-term view” is wonderful advice in a blog. A bit harder to follow in the real world when your customers flee after a string of poor performance. “Invest in companies run by strong management teams” takes three seconds to write. Discerning whether someone is actually a strong manager can take months or years of painful, often personal, analysis.

Professional investors often see writers and journalists as detached from the practical realities of investing, swayed by how things should work in theory versus how they actually work in reality.

Seeing investing from two points of view has led me to settle on the idea that neither side is right or wrong. Both make good points, and both are a little blind to the other side’s arguments.

Which is a big realization in itself.

There are also dozens of investing points of view I’ve never seen. What’s it like to be a retired investor? Or a regulator? Or living on fixed-income products?

I have no idea.

But those people understand things about investing that I don’t. Which means I should seek out their opinions and take them seriously.

We all should.