186 THE CREATIVE INVESTMENT TEAM
his best-seller The 7 Habits of Highly Effective People (Simon &
Schuster 1989), emphasizes this same point in the final habit,
“Synergy.” Covey says, “Buddhism calls this the middle way. Middle
in this sense does not mean compromise; it means higher, like the
apex of the triangle.” The process of achieving this is very different
from a debate, where one side wins. Rather, “they communicate
back and forth until they come up with a solution they both feel
good about. It’s better than the solutions either of them originally
proposed.”
Another powerful thinker, Ken Wilber, recognized by many as
one of the brilliant minds of our time, expresses synergy this way:
“Evolution always transcends and includes, incorporates and goes
beyond.” Real progress does not claim that one way is right and
the other wrong, but that a higher and better way includes ele-
ments of each.
Examples of either/or thinking in the investment world abound.
Fundamental analysts and technical analysts go at each other ham-
mer and tongs. Value investors and momentum investors argue like
actors in a beer commercials (“tastes great,” “less filling”), back
and forth. In truth, all of these schools of thought have something
to offer.
It’s also like this with behavioral finance advocates and effi-
cient market theorists. The former argue that investors are irratio-
nal, that they make systematic and predictable mistakes that “ra-
tional” people would not make. In opposition, efficient market
believers maintain that people are rational and act rationally when
it comes to financial decisions.
Who is right?
Are we irrational or rational? Woody Brock, economist and
president of Strategic Economic Decisions, Inc., addresses this split
in a Financial Analysts Journal article (Dec. 1998) that incorpo-
rates “both/and” thinking instead of “either/or.” He calls the ar-
ticle, appropriately enough, “The Future of Behavioral Finance: A14-25 ware 186 1/19/01, 1:16 PM