Skip to main content

The Broken Record of Broken Records.

 



When Roger Bannister first ran the 4 minute mile, it changed running forever. Broken records shake up preconceive notions and challenge our limits. Bannister's performance, a feat once considered impossible is now commonplace for runners. 

If you pay attention to financial news, it'll appear that records are being broken everyday. The S&P 500 hitting a new high. The Dow suffering its largest drop. These headlines are dramatic but are they meaningful?

In markets, things that never happened before ironically happen all the time. The novel is routine and nothing to fret about. 

There's a lot of moving pieces in finance and endless combinations can occur to form a record-breaking narrative. These are largely cosmetic.

The markets are rich with data, data that can be sliced and diced until you find something "historic". Timeframes, sectors, factors - tweak the parameters enough and you'll find something everyday.

You can do the same in your life. When you had your coffee this morning, it was the first time you had that coffee, at that time of day, on this calendar day and year. A first? Technically. Meaningful? No. 

True record-breaking events like Bannister's are rare. Most is noise, especially in the markets. Changing nothing, the principles of sensible investing remain the same. 









Comments

Popular posts from this blog

The Art of Giving Feedback

Constructive feedback is an awkward affair. You don't want hurt feelings, but recognize the importance of honesty. You've tried the classic "hoping things will get better on its own" and unfortunately it hasn't played out. When giving feedback, here are a few things that I try to keep it mind. Start with empathy. Step into their shoes and understand their story. If you don't know, ask. Be genuinely curious. Feedback is a dynamic affair. Shared communication with a shared goal towards progress. Take the emotion out of it. Focus on the situation, not the person. Focusing on the person adds unnecessary weight to an already emotionally-bloated event.  Be specific. Give clear examples. Vague feedback equals dismissed feedback.  Doing above won't de-awkward things fully, but it will dampen it and increase the chance of better outcomes. 

Today's Special: Humble Pie

You champion a project, fight for an idea, and then...reality sets in. That churning in your stomach isn't butterflies, it's the realization you've missed the mark.  Pride will puff up your chest, and kick in the "defend at all costs" instinct. But arguing with the umpire never changed a call. Admitting you're wrong isn't a sign of weakness. It can strengthen your professional standing. In a world obsessed with the illusion of infallibility, the courage to adjust course is a breath of fresh air. It shows you're confident enough to be wrong, and adaptable enough to learn from it. Do your research, think critically, and stand behind your decisions. But when the data whispers (or screams) otherwise, don't be afraid to swallow that slice of humble pie. Be the first to acknowledge. Don't wait for someone to point out your mistake. Be open, take responsibility, and most importantly, focus on what you're going to do to address it. Don't dwell ...

Negative Feedback, Positive Lessons

In the battle against plastic bags, a five-cent tax was shown to be much more successful at deterring usage than a five-cent credit for bringing your own bags. Carrots satisfy but sticks sting, and they sting hard. So we default to the less painful choice of avoiding loss. Loss aversion impacts the way we process information. A 2019 study  invited participants to learn through a series of multiple choice questions. Each question only had two options to choose from. Whether guessing correctly or not, they would still learn the right answer.  Despite the identical learning opportunity, participants were much more successful at recalling the answers they guessed correctly than those they got wrong.  "You're right!" feels good. We savour the moment, analyzing every detail.  "You're wrong!" stings. We want to quickly forget, dismiss, and move on.  When we succumb to loss aversion, we miss opportunities to learn. Failure is part of the process. We'll experie...