How are your powers of observation? When you look, do you really see? if you are a good analyst, do you see what other do not? This is an important skill that is often underappreciated or not even discussed. When you look at financial data, what do you see? when you look at a price chart, what do you see? everyone has the same information, so the only difference between analysts is their ability to see what others do not. Many great works of art have been around for centuries, but a first-time observer or even an observer for decades may see something new or different.
Amy Herman, the author of Visual Intelligence: Sharpen your perception, change your life, has been running classes for years on training detectives and other professionals on being more perceptive. She takes NYPD detectives to the Met and asks them to look at painting and describe what they see. She wants to sharpen their thinking through looking at art. For example, what do you see in the famous Manet painting, "A Bar at the Folies-Bergere"?
The detectives can then become better aware of their biases and perceptual filters. We often see what we want to see or what we are told to see, so we have to adjust our thinking to be more open to what is in front of us. Try not to look at a painting based on what we think we see, but on what is actually present. Look without bias and separate fact from opinion. Focus on the details. Ask first, who, what, when, and where, then take the next steps to why. Do not make faulty assumptions and learn to first be objective. Looking without bias will often allow you to see things in plain sight along with missing details. Say what you see, not what you think - the classic separation of fact from opinion.
If you are being unbiased, you need to avoid subjective words and phrases like, "obviously, clearly, never, always, actually or it goes without saying...". Investors should think about their forms of communicating through the 3 Rs: repeating, renaming, and reframing. This will clarify for the sender and receiver of information. You need to provide clarity to others what you are seeing. To avoid your biases, follow Herman's three rules: 1. become aware of your biases and boot the bad ones, 2. don't mistake biases for facts; instead use them to find facts, and 3. run conclusions past others to get a second opinion.
This may be an odd conversation for an investment blog that often focuses on quant research, but good research is about better seeing of the facts. If you are a good observer, you will be good researcher.
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