Good Information Vs More Information

Suppose you are a fisherman and your goal is to catch as many of the highest quality fish as you can. There are a few ways you can go about accomplishing this goal. First, you could throw out your net at random and spend your entire day dragging the lake–covering as much ground as possible. If you can move quickly enough, and with a little bit of luck, you might just end up with quite a few of the fish you’re looking for. Goal accomplished, but is this really the best use of your time?

There’s another more efficient and more productive way to catch fish. Suppose, before even getting into your boat, you did some research on where the fish you’re looking for are most often found. Instead of randomly dragging your boat around the lake, suppose you planned your course based on where the fish would most likely be. Then, once you pinpointed your destination, you spend your entire day fishing that one area. How much more of the fish are you likely to catch? Chances are, you’ll find much more of what you’re looking for when you know where to look.

Finding high quality information in the world of investing can be compared to fishing. There are individuals who take in everything they can. They follow all the news networks and media. They read all the papers, scour the blogs, and browse the magazines. They search far and wide to find every nugget they can to make them better investors. I would agree that these people would be better off than the people who don’t review their investments.  Just like the fisherman who drags his net randomly would be better off than the one who never gets into the boat. But, just like that fisherman, there is a better way to find good information.

The most savvy investors know where to look for the best information, and they spend their time exclusively mining those sources for everything they can get. Why sift through the entire island when you know precisely where the treasure is buried? A lot of bad information doesn’t add up to good information. The best investors find which sources really provide quality information and focus all of their time in learning from those sources. Don’t waste your time searching the whole lake–go where the fish are.

If you know the right things, you don’t have to know everything. The financial news is filled with speculation and following all of it can lead to information overload and downright confusion. To be a great investor, you don’t need to fill your mind with all the moving parts of the market. All you really need is a few guiding principles.

If you work with a coach to develop the guiding principles that are best for you, you won’t need all the clutter that other investors are filling their heads with.  You’ll have clarity when you follow these guiding principles.  If you need help developing these guiding principles, feel free to reach out to us for a free consultation. We want to help you sift through the sea of information and zero in on what really matters for you.