For myself, one of the most momentous insights into life and investing happened over 25 years ago when Sir John Templeton, who was exceptional as both an investor and a human being, talked about the profound importance of pairings in determining the quality of one’s life. There are infinite examples all around us from which to choose – perhaps the most obvious being the pairing decision you make in choosing your significant other. But imagine these famous pairs, for example. Where would Lennon be without McCartney? Sherlock Holmes without Watson? Paul Simon without Garfunkel? You understand the depiction.
Templeton’s belief was that the best pairings act as catalysts to enhance and empower each individual element – literally resulting in an equation where one plus one equals three. Therefore, choose carefully.
A few examples from my Tensile Trading investing methodology reinforce this Templeton principle. A successful investor would have given much thought and be able to explain in specific detail how and why he or she made certain choices and decisions concerning essential pairings such as these:
- Core and Explore
- Fundamental Indicators and Technical Indicators
- The Investor Self paired with an appropriate Investor Methodology
- A Buying Strategy and a Selling Strategy
Choosing the right combinations and understanding how they work together is where your catalytic profits come from.
Just to illustrate the consequence of this pairing mentality in my own life outside of investing, let me digress and offer a personal example. When I was at business school, Akio Morita, the co-founder of Sony, spoke to us about his new product development strategy and his ‘secret sauce’. He described his technique of unbundling product attributes and then reconfiguring the disparate attributes into new and unique pairings that resulted in groundbreaking new products. Think back to the 1980s and recall the handheld Watchman TV or the first Walkman personal audio units that combined radios with cassette players. He built an entire electronics empire on this strategy.
As a car enthusiast, I would love to see a new combination product that pairs a GPS navigation system with a radar detector and dash cam video recorder all in one convenient unit. Garmin and Escort, are you listening?! I submit to you that Templeton and Morita were on to something. I hope you agree.
Trade well; trade with discipline!
-- Gatis Roze, MBA, CMT
Presenter of the Tensile Trading DVD, Stock Market Mastery.
Developer of the StockCharts.com Tensile Trading ChartPack.
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