What You Are Really Selling
A friend working in the finance industry was sharing his observations at work. “Investors are looking for a return like this for the overall portfolio,” he said, while making a gesture of an upward trend-line with his hand, “but the returns of a single investment (in the portfolio) could look at this (insert gesture of a zig-zag line), or this (insert gesture of a line of a random shape with no obvious pattern).”
The performance of a single investment, when viewed on its own, could take on different shapes. When aggregated together, the investments form a portfolio with a risk & return profile that shows the desired pattern.
By looking at one and only one stock a certain investor holds, we could not extrapolate on the investment style of this person – however, as more of his holdings are revealed to us, we start to get a better picture of what his preferences are like. I like the symbolic meaning of the phrase: “to get a picture of” – one dot alone does not paint a picture; you need the overlay of multiple dots before you could have a sense of what the subject of the picture is really about. A pattern takes many inputs to form.
Imagine you are an investment professional, trying to pitch your product to an asset manager. You are not just selling the product itself – you are selling how it fits into the overall portfolio, i.e., how it correlates with other holdings in the portfolio, and how it contributes to the desired overall portfolio performance. You are not just showing your client the “zig-zag” performance trend line of your own product – you are convincing the asset manager that your product helps him to achieve the upward trend line he envisions for the entirety of his holdings.
What you are selling is not just one item in and of itself – you are selling its relationship with other items, or a story about what relationship it will be able to cultivate with other items, and what overall result this will bring. If you were a violinist trying to join an orchestra, you are not just selling your violin skills (though they are important) – you are selling the promise that you will be able to create a great symphony together with all the other musicians.
Being Nuanced = Being Attentive to the Web of Relationships
My conversation with the learned friend above shifted from finance to politics. He said if we were to color each US state with red / blue mapping to the dominance of republicans / democrats, what we would get is not just two colors – we would not only get different shades of red & blue, but also see different shades of purple, when red hits blue. Political preferences are nuanced.
When we say an observation is “not very nuanced”, we often mean that the observer feels to appreciate other contextual factors, and how these factors influence the judgment. In other words, being nuanced means being attentive to the web of relationships. It means instead of seeing binary colors (red vs. blue), one sees a full spectrum of colors, as different doses of red & blue interact with one another.
Forks = Severing Some Relationships & Creating New Ones
I continue the conversation about politics with my learned friend. We go on to discuss “forks” of political parties, i.e., where a group of members break off from the party, and start a new party of their own, most often due to disagreement on philosophies or strategies. There are other types of forks – e.g., the Reformation is a fork of the Catholic Church; Bitcoin Cash blockchain is a fork of the Bitcoin network etc.,
The action of forking out a group is analogous to severing the relationships with certain “nodes” in your current network. The action of creating a new group (and finding new nodes to connect to) is analogous to extending the antenna to forge new relationships. Think of this as a “relationship reorganization / restructuring”.
Our identity is defined not just by what we relate to, but also by what we do not relate to. The existence of a connection could tell us as much as the lack of one. What we choose could reveal as much as what we give up.
A good violinist thinks about how to play the best tune.
A great violinist thinks about how to play the best symphony.
A good fashion designer thinks about how to create a stunning dress.
A great designer thinks about how to create a stunning collection.
A good writer thinks about how to write an insightful article.
A great writer thinks about how to build an insightful portfolio.
Listen for the symphony. Watch for the collection. Write for the portfolio.
P.S. On a final & related note, I encourage readers to kindly check out other blog articles in my portfolio. #self-promotion 😉