In the early 1990s Harvard university conducted an experiment called the Monkey Business illusion (available on YouTube). In the clip the viewers are asked to count how many times the group of youngsters pass a ball amongst themselves. Suddenly in the middle, a bizarre gorilla walks into the rooms and thumps his chest and moves out. At the end, after you have verified the number of passes, you are asked if you noticed anything unusual, at least half, if not more, of those who were questioned asked, “What Gorilla”? This is called the illusion of attention. In our focus of a particular issue, we completely miss out on the other obvious things.
Of late, all news seems to be bad news in the Global Economy. Crude is hitting a new high, interest rates are spiralling up, rupee to USD is losing value like there is no tomorrow and to top it all off, domestically it is the election year and the political uncertainty surrounding the various aspects of governance has all the investors and investment managers in a confusion. All aspects surrounding the Indian Economy appear depressing.
Yet I will bet you that, if you look back 5 years from now, you would regret not having invested more money at this time. Simply because we did not notice so many positive things as we are too focused at the negatives.
So, while examining investment decisions; take a cautious but wholistic view of things. Never invest for the short term in a risky asset since it needs time to play out. Keep your eyes open for opportunities, as nature teaches us ‘Darkness is the perfect time for hunting’.