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. 


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. 

Bias For Clarity

Bias for action. Gets things done. Go-getter. Traits companies big and small look for. And for good reason, you're being hired to do things! However, action is a secondary step that often overshadows the primary step, direction.   Clear direction is the foundation that enables our actions to takeoff. Without it, we're stuck in the mud.  Striving for clarity is an underrated skill. Having the courage to ask ( seemingly ) obvious questions, and to check in, making sure we're all on the same page. "O bvious " questions are a low risk, high reward way to add value. At worst, you'll add confidence to our actions. At best, you discover a misalignment that saves us from a dead-end.  The more people, the more clear we need to be. The bigger the initiative, the bigger the risk of reaching the finish line, only to realize expectations were off.  Success is always uncertain. But we can be certain about what we want and what everyone's job is. Things that can be clea

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