188 THE CREATIVE INVESTMENT TEAM
they fly to small airports, and they don’t provide meals and movies... just good old peanuts and soda!
Does the new formula work?
Over the past decade, American Airlines stock (AMR) has lan-
guished, trading at around $30 then and now. In the same time
period, Southwest’s stock (LUV) has gone from $2 to more than
$20, a tenfold increase. Both/and thinking would suggest that some
third possibility exists that would be even more powerful than either
of these polarities.
Another realm in which both/and thinking has been extremely
powerful is valuation tools for picking stocks. Combining the
contrarian value models—low P/E and P/Book Value—with mo-
mentum indicators—Earnings Surprise and Price Momentum—
has produced some outstanding tools that use the best elements
of both. Jack Brush at Columbine was a pioneer in exploring this
combination.
The point is that we must train ourselves to be on the watch
for either/or thinking. When we spot it, an opportunity leaps out
to find the peak of the triangle and discover a new solution that is
more powerful than either point at the base. The new discovery
requires a willingness and ability to hold the tension of the oppo-
sites until the new idea emerges. Our discussion of personality types
suggests that lions are the least likely to wait for that new possi-
bility. They want to decide and move on. The influence of the jest-
ers (NP types) is critical in balancing the lions’ need to close and
take action.
The moral of this story? Creative investors are conscious in
their decision making. Sometimes they must decide between two
alternatives and move forward. Other times, though, they will see
that the real gold is in identifying the opposing forces and then
saying, “A third solution will emerge that is even more powerful
than either of these two.”
Then again, sometimes it’s best to just crane your neck and see
what the other guy is doing. That’s the subject of Chapter 21.
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