The Motley Fool

Is the dress blue and black or white and gold?

A weekend away camping is a wonderful tonic for the soul.

But, as you might suspect, I can’t really turn my investing brain off. At least, not totally.

Over those few days, and when I got home, I had three observations on a similar theme.

First, while we were on the drive, my 6yo asked to listen to one of his favourite kids’ podcasts (no, not Motley Fool Money — but you have subscribed to that, right?). 

In the episode of Brains On, they were discussing the development of elevators.

Originally for freight, elevators started to be used for passengers once they were safe enough. In those early years — and for decades after — they had a driver in each one.

Of course, the march of technology (and the ever-present drive to reduce cost) eventually saw the elevator driver replaced by the reliable push-button system we know today.

In the early days of these elevators, passengers were understandably nervous. They didn’t really understand the engineering, and all of the safety features were hidden above, below and around the outside of the car.

Sound familiar?

Yes, it’s the same sort of uncertainty that surrounds the introduction of self-driving cars. (Interestingly enough, we’re sanguine about — or unaware of — the fact that the overwhelming majority of passenger plane take-offs and landings are handled by computer… perhaps because the pilot is at least still in the cockpit should something go wrong).

Self-driving will come, of course. Just as automatic ovens, elevators, auto-pilot and a whole lot else has come. Technology’s march continues because it’s cheaper and, despite the protestations of those being replaced, more reliable and usually safer.

Yes, sometimes planes with auto-pilot crash.

Sometimes cars being self-driven crash.

You know what causes more accidents than both?

Humans.

It’s a very uncomfortable truth, but that doesn’t make it any less real.

Now to my second observation — this one on my return.
This morning, I saw a great tweet from the World Economic Forum.

It listed four technologies that we once took for granted that are now obsolete:

Remember the pager? Gone

The typewriter?

Record player?

VHS cassette?

All gone.

And plenty more on the way out.

Each of those were revolutionary. And each is now on the scrapheap.

And my third?

In my Facebook feed, I saw a picture of two people facing each other, looking at a numeral written on the ground between them.

To the person on the left, it was a 6.

To the person on the right — seeing it from the opposite direction — it was a 9.

So which was correct?

Both, of course.

Are you finding that uncomfortable?

Are you trying to justify why one or the other might be right?

Both of those reactions are completely understandable. But if you’re doing the latter, you’re missing the point.

You can waste a lot of energy and time trying to prove that you’re right. 

Hell, you might even actually be right.

But, other than an exercise in ego-stroking, what would that prove?

Would you convince the other person? Probably not.

As Nobel laureate Amos Tversky said,

“I’ve won 1,000 arguments, and I’ve convinced no-one”

More useful is remembering a very simple phrase — perhaps my favourite when it comes to human psychology:

“Perception is reality”

If you can internalise that, it’ll change everything about how you interact with the world.

And, how you invest.

Back in the day, I had a mate who wouldn’t buy Foster’s shares because he didn’t like the taste of VB.

Maybe you agree with him. Maybe you don’t. But it was — maybe still is — the biggest selling beer in the country. 

It doesn’t matter what I think of people’s beer consumption. Or their fashion choices, or how they spend their leisure time.

As an investor, you need to look past your own preferences, desires, fears and judgements.

I don’t particularly like the proliferation of gambling options in Australia. But that’s different to whether said proliferation will continue and be profitable for the gaming companies.

I don’t get the breathless love for Apple products (I’m #TeamGoogle), but I know plenty of people are almost irrationally drawn to the company, and it’s insanely profitable as a result.

I’m not a Marvel Comics fan, but I know most of the rest of the world goes nuts for the movies. 

I’ve never smoked cigarettes, but that didn’t stop Altria (previously known as Phillip Morris) being the best performing US stock over half a century.

Part of me wishes for the nostalgic ‘good old days’ of overhead projectors, bank passbooks and manual cars with wind-down windows, but the future is very, very different.

If I only invest through my own preferences, I miss all of the above. And much, much more.

As people, we’re free to make our own choices about how we see the world.

As investors, the only way to make those investments is to look forward. As the old saying goes, ‘What got us here won’t get us there’.

The best buggy whip company in the world, like the best typewriter and overhead projector companies, aren’t worth much anymore.

Times change.

No, you don’t have to invest on the ‘bleeding edge’ of technology. You don’t have to sell old economy companies just because they’ve been around for half a century (or more).

But you have to make sure they’re keeping up.

You have to look forward.

You have to invest in the companies not with the greatest pasts, but those with the greatest futures.

Investing is for the optimists. You don’t have to jettison the rose-coloured glasses when looking backwards, but you do have to take them off when putting your investment dollars to work.

As Steve Jobs might say, ‘Here’s to the crazy ones’.

Of course, I looked it up on Google! 🙂

Fool on!

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Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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