In today’s Money Morning…welcome the new kid…be an outlier and do what most people will never do…the opportunity that an outlier and technology can bring…and more…
Well that went fast didn’t it? Blink and you’ll miss it, 2016. It’s gone now. Welcome to 2017.
In all reality there is little difference between last week and this week. The only real difference is a number went from a six to a seven — and your perception that something is different.
Perception. Think about that word for a moment. In fact think about for a while. Sorry, let me rephrase again…think about it for the entirety of this year.
Perception is perhaps one of the most important things you’ll need to consider this year. And in your investing life, your perception of things can mean the difference between making money and not.
Before I get into today’s Money Morning and the idea of perception a bit deeper, I just wanted to make a quick note.
Welcome, Greg Canavan to Money Morning!
I’ve known Greg since I started at Port Phillip Publishing, about four years ago now. Greg’s one of the most astute, smart guys I reckon I’ve ever met.
If you’re a subscriber to The Daily Reckoning, then you’ll be familiar with Greg’s work. If not then you’re in for a treat. Greg and I might come at our investment strategies from a different approach, but we definitely share one key thing in common.
We both seek opportunity.
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Join us and be an outlier
Both Greg and I realise that no matter what’s going on in the world, in the markets, in the economy, there are opportunities galore.
The ASX in particular is a real stock picker’s market. That means if you can filter through the thousands of stocks there are plenty that can deliver huge returns.
But as Greg highlighted in Tuesday’s Money Morning, you need to check your beliefs at the door.
‘…I encourage you not to have any beliefs when it comes to the market. If the market moves, you move. If the market says jump, you say ‘how high’.
‘This is a very difficult thing for many people to do. They have beliefs, and want to put those beliefs to test in the market.’
Greg’s bang on when he says it’s hard to leave your beliefs behind when investing. Most investors act on emotion rather than cold, hard strategy. That’s why the average mainstream investor battles to beat the market. Investing in the stocks that everyone else invests in simply leaves you with average returns.
The best way, in my view, to make money from the stock market is to look outside the bell curve, and invest in ‘outlier’ stocks.
Source: Huffington Post
Click to enlarge
This is the bell curve I’m talking about. Most people (as you can see) fall in the middle. This is the mainstream. But here at Money Morning — and across all of Port Phillip Publishing — we pride ourselves on being the outliers. That’s the two ends of the bell curve. The ‘some people’ category.
That’s where we think the bulk of the action happens in investing. Being able to invest in opportunities that ‘most people’ will never see, and never even think to take advantage of.
However, in order to be an outlier you need to behave like one. In order to take advantage of the opportunities that exist on the fringes of the bell curve, you need to shake free your beliefs. You need to drop any perception you have on how things should be. You need to make sure that everything you see and hear about, you consider with the due thought and process it deserves.
Don’t discount something because you might perceive it to be ridiculous. As Greg wrote on Tuesday, don’t miss an opportunity because your perceptions state that it ‘doesn’t make sense’.
‘Doesn’t make sense’ is a chance to do something when most people are afraid to.
The opportunity of the ridiculous
I know all about these opportunities. I’m currently seeing them right now in front of my very own eyes. I’m at the Consumer Electronics Show (CES®) in Las Vegas.
It’s the world’s largest consumer technology trade show. It’s not open to the general public though. Only industry insiders. That’s why I’m here.
It’s a week of the latest in technology. The future. And much of it will come across as ridiculous. To ‘most people’ the tech that’s on display here, right now, doesn’t make sense. To many, it never will.
When I was here two years ago, self-driving cars were making a serious impact. When I spoke about it and wrote about it back then, people said it’d never happen.
When I started writing about artificial intelligence and cognitive computing ‘most people’ said it didn’t make sense.
This year I’m not sure what I’ll come across that doesn’t make sense. I’m not sure what I’ll uncover that’s ridiculous, which the mainstream will again dismiss. But I know one thing for certain — I will see tech over the next week that will change the world.
It will create opportunities to change the way we live our lives. And, importantly, there will be companies that you can invest in that could deliver astronomical gains to shareholders over the coming years.
This week at CES® is all about the things that don’t make sense. It’s about what the mainstream considers ridiculous. It’s about the positivity and opportunity that technology brings us, and can deliver to investors.
Remember this is predicated on the fact that you are open to a bit of risk. Being an outlier is no certainty for return. But it puts you in the game. And it’s a game that ‘most people’ will never play — that’s good for you.
However, you must check your beliefs at the door. Drop those perceptions you have of the world now behind us.
Get your head up, eyes open, and jump in to the opportunities that exist right now, right in front of you.