Left, Right, Left
The Week in Review -- August 14, 1998
by Jerry Thomas (email@example.com)
Scientists tell me that my brain has two sides: a "right" brain and a "left" brain. The left brain is the more serious of the two. It likes to take notes, memorize quadratic equations, study amortization tables, and solve the New York Times Sunday Crossword in ink. My right brain, on the other hand, likes to sit on the sofa and eat Cheetos.
Left brain: Quantum Physics. Right brain: Finger Painting with Ketchup. Left brain: Analytical Geometry. Right brain: Arena Football.
You get the idea.
Fortunately, I have a job where both sides of my brain get to boogie. As it wanders through Folly, the left brain can indulge in orgies of analysis. Fooldom is crawling with statistics, and ol' Lefty wallows in them. We've got more numbers than you can count. You want stock charts? You got 'em. Conference call summaries? Point and click. Meanwhile, the other hemisphere is getting down and funky with wacky Aruba-esque nonsense and general Foolish fun.
Take the topic of stock analysis, for example. You can use your staid, by-the-book, ground-up, numbers-only approach. It's a solid method and an esteemed tradition. It's a discipline that is, in a word, Boring. That's capital-B Boring, as in the Boring Portfolio, as managed by TMF Boring, aka Greg Markus. Yes, the Boring Portfolio has been seriously underperforming the market these days, thanks in part to getting blindsided by Oxford Health Plans (Nasdaq: OXHP) earlier this year, but that underperformance does not diminish Greg's work in creating a place to learn about stocks and investing. This week Greg gives us a double-whammy of analysis in his study of Borders Group (NYSE: BGP), first in his synopsis of that company's second quarter conference call, and next in his Wednesday Boring Portfolio recap. Very left-brained, stuff, Greg.
Then there's that other approach to looking at stocks. The right-brained kick-the-tires approach. The old open-the-factory-window-and-take-a-whiff method. This is nothing more or less than getting to know your investment intimately, beyond the numbers you'll find on the financial statements. If you wanna invest in Dunkin Donuts, Peter Lynch might say, you gotta eat some pastry. It's what legendary investor Phil Fisher calls "scuttlebutt," and it came under close examination Wednesday's Fool on the Hill column by Louis Corrigan (TMF Seymor).
Left brain: balance sheets. Right brain: counting cars in the parking lot. Got it? Use both approaches in the proper measures and you might end up as a student of Warren Buffett, a fellow who uses his whole brain and then some.
The markets, meanwhile, were exhibiting behaviors not of the left brain, nor of the right brain, but of the hind brain -- that vestigial reptilian nerve bundle that reacts reflexively to random stimuli with primitive emotions we call "greed" and "fear." In other words, they were goofy.
"How many thousands of collective hours," asked Jeff Fischer (TMF Jeff) in Thursday's Fool Portfolio Report, "have been spent watching and reading about the stock market's daily moves this week?" A good question, especially considering how little the back-and-forth means in the long term. That's why if you're at all upset about the way the stock markets have been behaving lately, you would do well to study the comments of Fool co-founder David Gardner, who in Tuesday's Fool Port report asked his own question: "Is this the Correction?" When placed in its proper perspective, the proper answer can only be, "Who cares?" This piece from David is one to save, print out, and tack to your wall for reading on those days when short-term market moves have you thinking in a less than resourceful way.
Speaking of resources, please do yourself the favor of spending some time this weekend with two outstanding interviews. First, there's Louis Corrigan's multi-part interview with Tom Kippola, co-author with Geoffrey Moore and Paul Johnson of The Gorilla Game, one of the most popular investing books to appear in years. Louis poses some tough questions about Microsoft's legal troubles and about the raging Internet stocks, a sector that Kippola believes is in a tulip bulb craze. Moore's innovative concepts expressed in such ground-breaking books as Crossing the Chasm and Inside the Tornado have generated quite a following, and after studying the interview with his colleague, Mr. Kippola, you just might want to join it. Also, gaming stock enthusiasts will want to be sure to listen to this week's StockTalk interview with Jim Murren CFO of MGM Grand (NYSE: MGG), available in both RealAudio and transcript form.
This week's moral, then, is to make both halves of your brain happy. Read Proust AND Archie Comics. Watch Schindler's List AND Ace Ventura. Eat All-Bran AND Lucky Charms. It makes for fun living.
Until next week,
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