Poetic Pachyderm Pointers

Many investors make decisions based merely on an illusion of knowledge

Jerome V. Bruni, President

The intelligent investor applies wisdom gained from many sources.  Indeed, sometimes it's best to find useful lessons far from Wall Street and then apply them to the world of investing.  Consider the clever poem, The Blind Men and the Elephant, based on an Indian fable and written by the 19th century American poet, John Godfrey Saxe.


It was six men of Indostan

    To learning much inclined,

Who went to see the Elephant

    (Though all of them were blind),

That each by observation

    Might satisfy his mind.


The First approached the Elephant,

    And happening to fall

Against his broad and sturdy side,

    At once began to bawl:

"God bless me! but the Elephant

    Is very like a wall!"


The Second, feeling of the tusk,

    Cried, "Ho! what have we here

So very round and smooth and sharp?

    To me 'tis mighty clear

This wonder of an Elephant

    Is very like a spear!"


The Third approached the animal,

    And happening to take

The squirming trunk within his hands,

    Thus boldly up and spake:

"I see," quoth he, "the Elephant

    Is very like a snake!"


The Fourth reached out an eager hand,

    And felt about the knee.

"What most this wondrous beast is like

    Is mighty plain," quoth he;

" 'Tis clear enough the Elephant

    Is very like a tree!"


The Fifth, who chanced to touch the ear,

    Said: "E'en the blindest man

Can tell what this resembles most;

    Deny the fact who can

This marvel of an Elephant

    Is very like a fan!"


The Sixth no sooner had begun

    About the beast to grope,

Than, seizing on the swinging tail

    That fell within his scope,

"I see," quoth he, "the Elephant

    Is very like a rope!"


And so these men of Indostan

    Disputed loud and long,

Each in his own opinion

    Exceeding stiff and strong,

Though each was partly in the right,

    And all were in the wrong!


It was the physicist Stephen Hawking who observed, "The enemy of knowledge is not ignoranceit is the illusion of knowledge."  Whenever I read this poem, I think about those investors who are convinced that they have found the secret to investment success, based only on their own limited experience. Unfortunately, just as with the six blind men, these investors often possess merely an illusion of knowledge.  The process of intelligent investing is truly a complex and difficult one, incorporating a wide variety of inputs and requiring both objective and subjective analyses.  After all, if investment success were a simple matter, most people would be rich.  Further, in all competitive endeavors, for each participant with a better than average record there must be a corresponding participant with one that is worse than averageeven if all participants work very hard.  In general, there are no easy roads to success of any sortand the more rewarding the success, the more intense the competition.  (Think of the competition for the relatively few jobs for professional athletes.)  Investors who focus on a limited number of investment concepts, while casting a blind eye on all others, are apt to meet as much success as the blind men of Indostan.  On the other hand, those who take the time to acquire a clear view of the big picture are far better positioned to reap the rewards of investing.