20 THE INVESTOR
superior results. Sherlock Holmes said, “My peculiar art of detec-
tion results from the interplay of reality and imagination.” He meant
that he had both observational and creative abilities. He could take
in the facts and then play with them to see beyond them to the
truth that we “Watsons” cannot perceive.
To give a sense of how complexity plays out with our master
investors, Figure 3.1 shows some examples of them going to each
polar extreme.
Without an understanding of complexity, the statements in the
figure are confusing. The masters appear to be speaking out of
both sides of their mouths. (Sort of like the man who said, “I used
to be schizophrenic, but we’re better now.”) Their statements makeSoros: “[C]onstantly reading “Unremitting con-
Breadth/Depth newspapers and centration”; “permits
talking to well- no distractions.”
placed sources around
the world.”
Buffett: “[Can] rattle off the “I look for businesses
Observation/Creativity financial characteris- in which I think I
tics of every building can predict what
and business he passes they’re going to look
in town.” like in 15 or 20
years.”
Lynch: “The stock doesn’t “Obsessed with
Objectivity/Passion know that you own stocks”; “[y]ou won’t
it. Don’t take it per- get there if you don’t
sonally.” love it.”
Zweig: “Discipline is the key; “The problem with
Discipline/Flexibility never fight the tape.” most people who
play the market is
that they are not
flexible.”Figure 3.1 Complexity through opposition.03 ware 20 1/19/01, 1:01 PM