There is an ancient story of a group of blind men who were summoned to a palace where the prince had brought an elephant. The prince then asked each of the blind men to feel the elephant and to then describe what an elephant was.
In the case of the first person, whose hand landed on the trunk, he said “This being is like a thick snake”.
For another one whose hand reached its ear, it seemed like a kind of fan.
As for another person, whose hand was upon its leg, said, “the elephant is a pillar-like a tree-trunk”.
The blind man who placed his hand upon its side said, “the elephant is a wall”.
Another who felt its tail described it as a rope.
The last, who felt its tusk, stated the elephant is hard, smooth and like a spear.
While each of them was right based upon what they had experienced, none of them actually described an “elephant”. In some versions of the story, they come to suspect that the other person is dishonest in their description and they come to blows.
The moral of the parable is that humans have a tendency to project their partial experiences as the whole truth, ignoring other people’s partial experiences. One should consider that one may be partially right and may have only partial information.
The elephant was the reality but each of the blind men used their own limited reality to define what an elephant was.
What does this have to do with investing?
In my three decades of professional investing, I have learned that the financial industry is very good at “partial truths”. There are many things that are used to describe attributes to successful investing but each of those things may be only partially true, and thus, as in the example of the blind men, provide only a limiting view.
Unfortunately for investors, this can very costly.
Stay tuned for my upcoming series, “YES BUT…” as I expose Wall Street’s limiting truths one by one.
You cannot afford to miss it.