Spreadsheets won’t decide answer
Historian Will Durant once said, “Logic is an invention of man and may be ignored by the universe.” The world is driven by forces that cannot be measured.
Robert McNamara was hired by Henry Ford II to help turn Ford Motors around after World War II and needed someone to run business as an operations science, driven by the truth of statistics.
Later, McNamara took that skill to Washington when he became Secretary of Defense during the Vietnam War. He decided that everything be quantified, with daily, weekly; and monthly charts tracking the progress of every imaginable wartime statistic.
McNamara’s strategy of statistics worked at Ford had but had flaw when he applied the same at the Department of Defense. In a conversation, Edward Lansdale, head of special operations at the Pentagon, said “Something is missing.”
“What?” McNamara asked.
“The feelings of the Vietnamese people,” Lansdale replied.
That feeling couldn’t reduce that to a statistic or a chart. This was a central issue with managing the Vietnam War. The difference between battle statistics brought to Washington and the feelings among those involved were million miles apart.
Ho Chi Minh once put it more bluntly, allegedly stating: “You will kill ten of us, and we will kill one of you, but it is you who will tire first.”
Decisions aren’t made on a spreadsheet
Many time a lot of things don’t make any sense. The numbers don’t add up, the explanations are full of holes. And yet they keep happening. Because decisions aren’t made on a spreadsheet, where you just add up the numbers and a clear answer pops out. There’s a human element that’s hard to quantify and explain.
By now some must have taken the idea how does this story relate to investing. Brain initiates the idea of investment, churns all the numbers, takes loads of information, gets cozy with colorful charts but in the end, it sends it to heart to decide with emotions and sentiments. That is the reason for many investors for not having successful investment journey. Investment has always been a game for those who are fundamentally strong with their behavior.
At Shalibhadra, we don’t immerse ourselves only in past data or colorful charts. Our belief system revolves around managing investor behavior and handholding them through their investment journey.
Nishit Siddharth Shah