How’s your elephant??
ByI had 2 conversations today that reminded me of how easily we can be put off things through bad advice. I don’t know whether it is true or just made for good cartoons but the fact that elephants are afraid of mice is a good analogy.
I find often investors hve made major decisions based on one erroneous piece of information. 2 examples that come to mind immediately are someone telling me last night that they fixed a mortgage for 2 years at 9.5% because someone told them that was the best they could get. Or the lovely lady I met today who sold off her portfolio because she read Ollly Newlands book about the impending collapse of property in 2003 and is now having to start again!!
If some small piece of information comes your way and you find yourself reacting to it you need to do the following:
1. Analyse the information. Is the source reliable? Is the information verifiable? Is the information biased?
2. Evaluate the information. Is this piece of information relevant to my reaction? Do I need to factor it into my decision making.
3. Verify the information. If you are going to change a decision based on this info you need to know that it is true.
4. Either adopt or reject the information.
If you are easily changed by unreliable information you need more robust goals and more self confidence. It should NOT be simple to get you to change tack without you going through “due diligence” on the information.
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