Rational Advisor

People act based on internal models and also look to confirm their preexisting internal axioms.

Please consider a few points…

1. Confusion results when there is too much information as compared to knowledge, a trend that will continue exponentially. A good investor can control this by mapping the information back to fundamental principles, knowledge and wisdom. This will greatly simplify what needs to have a process, and Simplify!

2. Investors must continue to think fundamentally and resist adopting trends simply because momentum has been gathered behind them. Think objectively and collaborate with other objective thinkers.

3. While there are multiple perspectives behind any decision: financial, short term, long term, approach, etcetera, there is only one end. Make sure that your fundamental analysis considers all the camps appropriately and is not steam-rolled by a single perspective.

I do not agree that managing by short term intervals is a robust answer. Companies are highly coupled dynamic feedback systems. Our state today is a result of actions years ago. There is a time when short term controls are needed, mostly reactive, but long term principles are what will govern company success and investor successes. One can not cost-cut to success. One might even argue that if you found yourself in need to cut costs, then a mistake was made earlier. Most investors tend to mistakenly think that the cheapest cost is a better product - this is a mistake as was seen by the cheapest cost vehicle last year equity market ETF’s having some of the greatest drops TSX index -35%