Business & Money

There’s this saying in life that goes “perception is reality.” It basically reflects the idea that truth is often less important than perceived truth.

However, in investing that’s not the case. You might say it’s all about finding gaps between perception and reality. If you can find an asset where the intrinsic value is higher than the value prescribed by the market, you have an opportunity to profit from that gap.

If you think of it this way, there are really only 2 strategies for making money.

You can be better than other people at assessing reality. Or you can be good at spotting goofy perception.

Human Progress

You know that phrase “keeping up with the Joneses”? It describes the tendency for people to use the socioeconomic position of one’s neighbors to measure their own success.

I think the incarnation of the phrase has changed over time. Back in the day, I believe it was about buying houses and cars in response to those bought by other people in the neighborhood.

Now, you hear that millennials are more included to by experiences, as opposed to expensive things. So keeping up with the Joneses is all about going to nice restaurants or traveling to expensive destinations (and of course posting everything to social media).

But there’s an important difference between the old and the new. Houses and cars have some residual value, while experiences do not.

Philosophy

I was reading an article earlier this week when I came across a word that sounded cool, but I didn’t know the meaning. The word was “mendacity.”

The gut reaction was to open another tab and look up the word on Google. But I caught myself before the query results showed up and quickly switched tabs back to the article.

Before we were all trained to turn to Google with every question, we had to use good old context clues to ascertain the meaning of words. Here’s the sentence the word appeared in:

“I just can’t abide the mendacity and the pleasant little lies and the outright raccoonery that I perceive as infesting the investment world.”

The article was about how many investors behave like sheep with a herd mentality, following the whims of financial media outlets. So, coming back to mendacity, I read it to mean lunacy or outright stupidity that conforms with the crowd.

When I looked up the word, Merriam Webster pointed me to “mendacious,” which means “given to or characterized by deception or falsehood or divergence from absolute truth.”

I wasn’t absolutely correct, but not too far off. And I understood the meaning of the sentence just fine. Plus, there’s the added benefit of the mental exercise of figuring something out. You’re far more likely to remember something that you’ve worked out yourself rather than just being given the answer.

My Latest Discovery

Many people automatically associate partying with drinking or other illicit substances. They think of late nights and weird subcultures. But that’s not always the case.

A friend recently invited me to Daybreaker, which is an early morning dance movement in 22 cities across the US. They host occasional 7 am parties where you meet tons of interesting people while dancing to the sunrise. It’s a pretty unbelievable experience!