In my last column I looked at things that waste your time as an investor. That includes "orangutans", my name for media talking heads like me who often inject unnecessary urgency. Acting in haste can send you broke in this game. It also includes the folly of allowing human emotions to interfere with your investment decision making. You need to think like Spock, not someone out of a Mills & Boon novel.
Keeping the theme going, here are more things that waste your time.
Sorry. But without us really noticing, software has killed the art of presenting. PowerPoint has sucked the art of entertainment out of the presentation process by empowering even the most unimaginative, reclusive, bland but credentialled introvert to present "well". It's that good.
But I think the time has come to call the ball, we've seen enough. Presenting is a privilege and an art form and that art isn't found in the reproduction of a text book in slide form. Presentations take originality, imagination and some hard work. Presenting is a "show" and presenters have a duty to perform for the audience.
There is a fantastic book called Business Storytelling for Dummies. You'll get the idea in the first couple of chapters. It talks about left-hand brain and right-hand brain and how a lot of presenters appeal to the left-hand brain, which handles information. But if you want to make an impact you have to present to the right-hand brain.
That means telling a story full of courage, cowardice, bravery, success, failure, character, luck, anything that provokes emotion, because that's what engages the right-hand brain. You can present information, even really important information, but if the audience can't remember your name, you've failed.
Humans input mechanisms are terribly slow. We have eyes and ears not a USB drive. You cannot download to a human the way you can to a computer. That means we have to choose very carefully what we bother to read and listen to. Listening is the slowest input method, reading is faster, so if we are going to listen to anybody it had better be good because if you're just passing on information, sorry but we can read that in a tenth of the time. So put on a show. Bottom line: face-to-face contact is very inefficient so choose carefully who you listen to, otherwise they're simply wasting your time.
Economists from big institutions
The essence of investment is deciding what stock you hold and when. It's not about interpreting every syllable uttered by Janet Yellen or Philip Lowe. Despite that 80 per cent of our focus is not on the eternal conundrum of stock picking, it is focused on what the economists and strategists are saying. On what I call "macro crap".
So let me explain something basic about economists and strategists. Almost all of them, certainly the well-known ones in Australia, are representatives of large product-selling institutions. In Australia the best-known economists and strategists are from the major banks and the major fund managers.
Understand then that each of them has a legion of salespeople behind them whose job it is to sell financial products under the same brand. Because of that they will never tell you to sell. They have one simple imperative: calm the clients down, keep them happy, keep them invested in their company's products, and, as a side issue, portray the institution as intellectual and smart.
They do that well and they do it by presenting a calm, intellectual persona that suggests that the markets are predictable and that the client need not worry because their adviser has everything pinned down, including the future. Their role is to keep the clients invested in their products and they do that by presenting the impression that the market risk is benign, and on the contrary, the financial outlook is certain and optimistic because certainty sells financial products.
Yes all the economists and strategists are intelligent, educated and presentable, but their opinion is not independent. They have no freedom to express doubt because if they did, if they were ever to say "sell", they would have 1000 product salespeople who recently sold product under their brand calling for them to be sacked. Most economists are, unfortunately, pacifiers. Most of what they tell you is designed to alleviate your worries and keep you invested. Because of that, because of their corporate responsibility, most of what they tell you, is, unfortunately, also a waste of time.
Marcus Padley is the author of the daily stock market newsletter Marcus Today. For a free trial of the Marcus Today newsletter please go to www.marcustoday.com.au.