“The essential difference between emotion and reason is that emotion leads to action while reason leads to conclusions.” — Donald B. Calne
The Motley Fool has a way with words. Their mantra is simple — Get smart. Have fun. Make money. What I like about their focus is they teach people how to think long term and leverage proven practices for results. I also like that they share their insight in an actionable way.
We Are All Intelligent
I always look forward to their Motley Fool Stock Advisor because it’s some of the best copywriting I ever come across. The March 2012 edition really caught my eye:
We are All Rocket Surgeons.
What a headline. Their point is simple. We’re all intelligent and have the ability to do wildly wonderful things, if we avoid being ruled by our emotions, and if we keep it simple.
I just had to share the words and wisdom from Tom Gardner of the Motley Fool.
It’s Simple, but It’s Not Easy
When you really master something, you can usually express it simply. But expressing it simply, doesn’t make it easy, and knowing what to do, isn’t the same as doing what you know. Tom writes:
“Believe it or not, you have the requisite intelligence to be a great investor. No, you don’t need a Ph.D in finance or a handful of acronyms attached to your name. You don’t need an MBA. As legendary investor Warren Buffet put it, investing ‘is not a complicated game.” It’s simple, but it’s not easy. You have to have an emotional stability.’”
Check Your Emotions at the Door
Emotions are the juice of life. They can also be our Achilles Heel or downfall. A good metaphor is the elephant and the rider, where the elephant is the emotional side, and the rider is the rational. Tom writes:
“… I pushed to include ‘check emotions at the door’ as a key principle for investing the Stock Advisor way. So many investors out their fall prey to their emotions. As they gain some investing experience, they trade more frequently, or they dabble in penny stocks, or they take on dangerous leverage in the quest to boost their returns like the Wall Street banks do.”
The Simplest Solution is Usually the Best
Simple works. Just like how something sounds too good to be true, something that sounds too complex, usually is. Fight for simplicity and challenge yourself to know the simple truth. You can always add complexity on top, but in the words of Bruce Lee, “Hack away at the unessential.” Tom writes:
”If this sounds familiar, keep in mind a principle attributed to the 14th century Franciscan friar William of Ockham, of Occam’s Razor fame: The simplest solution is usually the best. Or consider this more contemporary and germane advice from another legend, Peter Lynch, “Never invest in any idea you can’t illustrate with a crayon.” It doesn’t get simpler than that.”
What’s the call to action here? Simple. The next time somebody says you can’t do something, challenge the assumptions. Challenge them and challenge yourself. First find the simple story. Next ask, “Is it worth it?” Finally, if it is worth it, don’t ask yourself,, “why” you can’t. Ask yourself “how” you can.
Nice!
My Dad used to say the shortest path is the one you know. He also used to cite a well known figure of the past that goes along the lines “let’s first get into the fight, then we’ll see…”
I think da Vinci put it the best though “simplicity is the ultimate sophistication.”
I once wasn’t impressed much by simple things until realize how much thought and energy it takes to make them “look” simple and actionable for others. Since then i am hugest fan of simple actionable things.
Hi JD .. great post, as is Alik’s comment – I like that … Simple is as simple does … That’s the way I like to do it ..
Cheers Hilary
@ Alik — I like the “let’s roll up our sleeves” approach. Drucker was a fan of having empathy, whether it’s because of the path you know first-hand or because you got into the fight.
da Vinci has a way with words and I think it’s true — simplicity is elegance in action.
@ Hilary — Thank you. Yes, Alik added a sweet set of gems to our simplicity tool-belts.
I enjoyed this post tremendously. I am still trying to grasp that investing can be simple but not easy though. The Motley Fool Stock Advisor certainly has a way of words!
I used to lose a lot of money on the stock market and then I realized that without emotional mastery, I should not be doing any form of trading. Thumbs up to the “check emotions at the door” advice!
@ Evelyn –Thank you.
In my experience, breaking into investing is tough without good mentors. I’m always amazed by how many strategies and formulas there are, based on scenarios.
Hi JD,
Love your point about keeping things simple.
Sometimes our jobs are harder than they have to be because we overly complicate things.
I saw this personally. As you know we launched a new web app and that came with a host of additional responsibilities for me.
One of the things we added was a direct buy membership for clients we sold directly. This way we could schedule followup emails when they came close to their year end.
However, we had sold a few clients previously before I had this follow up sequence built. I was struggling with how to grandfather people in, when the owner of our company said, “why don’t you just set up a meeting 45 days before their one year out with the sales guy that brought them in to talk about renewing.”
Such an obvious and straightforward way to handle compared to programming individual reminders for each of the grandfathered clients.
I’ll definitely think simpler now.
Bryce
@ Bryce — Your story reminds me of how important it is to know the goal, and stay flexible in how to achieve it.
I think the real power of simplicity shines through when we have to maintain our solutions over time. Complexity is a price we keep on paying, and I’ve never regretted investing in simplicity.
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