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You Can't Become Rich In Your Pocket Until You Become Rich In Your Mind | ||||
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With any major decision including investments, it helps to use the Magic T, one of the most valuable tools I have ever worked withSharpening Your Ability to Process Investment Information from Print and Television Media YOUR ABILITY TO BE A CONSISTENT WINNER IN THE STOCK MARKET, and in life for that matter, is in direct proportion to your ability to process information correctly. As a Naval officer stationed on the aircraft carrier USS Wasp, I was part of a crew conducting a routine exercise in the North Atlantic early in 1963. From my position on the bridge, I could see the forward and middle parts of the ship, but not the back where the third elevator was located. One bright spring day in March, two helicopters were getting ready to take off from an area next to the third elevator at the same time a jet fighter was circling the carrier requesting permission to land. Somehow the signals got confused and the air boss, Commander Robert Mead, gave permission for the plane to land at the same moment that the operations officer below deck gave the green light for the helicopters to take off. Neither officer could have foreseen the danger until it was too late, and the jet fighter crashed into one of the helicopters, sending flames from the explosion 100 feet into the sky. We were steaming into the wind at 20 knots. With the wind blowing about 15 knots, the combined 35 knots made it easier for planes to take off and land. When the accident occurred, the wind was blowing the flames into other planes that were parked on the flight deck. Captain William Brewer immediately ordered the ship to reduce speed and turn out of the wind. I got on the radio and advised the two destroyers who were on either side of the carrier that we were making an emergency turn. Once we were downwind, the flames subsided and the flight deck crews quickly extinguished them. However, it was too late for the pilot of the jet fighter and the three men in the helicopter. After this incident, a system of signal lights was put in place. Identical lights were installed on the captains bridge, the air commanders control location, and the operation officers station. In addition to three-way communication, all the lights would have to be lit green to launch fixed wing planes or red to launch helicopters. When the captain saw all three lights in unison, he would press a button and the lights would blink, indicating the all-clear signal. This made it impossible for such an accident ever to happen again. This experience taught me that you have to be aware of your surroundings and pay attention to details. My determination to avoid placing myself in a situation where something could go wrong extended to the stock market. Paretos 80:20 Rule made a lot of sense to me when I first read it. I knew that my success in helping clients was dependent on my ability to observe whether my thinking was with The Vital Few or The Trivial Many. What I learned about anticipating problems on the bridge of the USS Wasp, after that tragic accident on the flight deck occurred, was largely responsible for my success as a securities broker. also learned several things about being aware and processing information correctly through playing tennis. In the early 1980s, I was ranked 85th in the country in amateur tennis. That year, I was the number two seed playing a tournament in Key Biscayne, Florida. With my record, I was expected to make it to the finals. Playing in the center court, I was thrilled to see a couple of hundred people in the bleachers. A large crowd was unusual for a first round match. My opponent was a tall blond whose muscles rippled as he whacked a few balls across the net to loosen up. As I typically did during the warm-up before a match, I hit him various shots, some flat, others with spin, to see how he would handle them. I could tell he was not that great a player because he had good serves and strong returns, but he just did not seem to have his ground stroke technique down. I served first to start the match. After a couple of exchanges across the net, I noticed he was six or seven feet behind the baseline. My backhand drop shot was deadly, so I leaned in as if I was going to slice my backhand cross court and at the last minute stopped my racquet so that the ball fluttered into the air and landed softly on his side of the court, just on the other side of the net. I had him good. I stretched out my hand, caught the ball coming my way from across the net, and called out, Fifteen-love! Winning the first point was sweet. Love-fifteen! he shouted back to me. What? What was he talking about? Some of the people watching the game were my friends, and I could hear them laughing along with everyone else. They thought it was hilarious. Dont you know? one of them asked me. Youre playing the worlds fastest white man! My opponent was a world-class athlete who had won the silver medal in the Olympics in the 100-meter dash. He had closed the space between the back of the court and the net in time to connect with the ball and send it over to me. Only instead of hitting it back, I had caught it, and had lost the point. In all of my life in finance and sports, I have never been so sure I was right only to be shown seconds later that I was dead wrong. From then on, I have tried to be a little more careful before assuming anything until all the facts are in. More importantly, I got a fast lesson that day in sizing up other people. I had assumed my opponent was average at best and certainly no match for my skills. Exactly the opposite was the case. I learned with one backhand shot that it is dangerous to assume other people do not have what it takes. Think the best of them, and play your strategy accordingly. Never judge a book by its cover. The best way to improve your ability to process information from the media is to actively challenge what you are reading or seeing on television. Ask yourself Why am I getting this information? Who is giving me the input and why now? Does the information jive with what I already know? Is what I am being exposed to popular or is it a minority opinion? Does my knowledge of current insider behavior back the information or refute it? Did I recently hear people talking about this information at a party, and was I impressed with the people who believed in the information? The more you practice this kind of interaction with the media, the better you will get, and you will be well on your way to becoming part of The Vital Few. With any major decision including investments, it helps to use the Magic T, one of the most valuable tools I have ever worked with. Every day, you and I make as many as 50 decisionswhat clothes to wear, what to eat, and so on. If you are correct only 50 percent of the time with these small decisions, you are still alright. However, when it comes to major decisions, such as marriage, career change, relocation, or whether to take a major position in the stock market, you must try to make these decisions 100 percent correct. The Magic T will help you do that. Here is how to create the Magic T. Draw a large T on a full-sized sheet of notebook paper. Above the top left column, write one of your two major choices and at the top right, list the other choice. Under each of the two columns, write down five positive outcomes you anticipate from each decision. Now you have 10 positive points for your 2 choices. Identify one of the 10 that is the most important to you and give it a rating of 10. Be brutally honest with yourself, and try to remain totally objective. Rate the second most important positive choice a 9. Continue until all 10 have been rated. Add up the score for each column and you have an objective appraisal telling you the decision you should make. I have used the Magic T dozens of times myself and have taught it in seminars and consultations with many people. Following is a letter I wrote in January 2004 to my son Marcus, who lives in Holland with his wife and two daughters. It is a good example of the Magic T that I used in the past, and I wanted to share it with my son. He had just turned 42 and was faced with a major decision affecting his life and his family. I sent this letter to help him understand how to make the right choice in the midst of any emotional moments. |
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