The Mental Strategies of Top Traders: The Psychological Determinants of Trading Success

4.3. CASE STUDY ON LEARNING TO BE CREATIVE

I had the good fortune of talking to Jesse, who teaches a specific investment research process to his analysts when they first start working with him. His approach underscores some of the ways that the best investment minds transmit knowledge of their approach to the next generation of investors.

This discussion is worth including by way of showing how someone can be taught to think creatively. In addition, it supports my view that, with some effort, traders can develop a variant perception and unearth data that the rest of the Street hasn't yet discovered.

Kiev:

What's your view of the variant perception as a critical factor for creative thinking, and does it increase the probability that the bet is going to pay off?

Jesse:

I teach the importance of what I call the tension point. The challenge is to find the tension point in the investment. Because of the complexity of a company, you want to figure out where that tension is and what's behind it. Each company is going to have two or three things that really matter. I interchangeably use them. They are key factors and tension points. The best investments are where Wall Street doesn't even know the tension points. A tension point is the key factor that's going to drive the path of the investment, not the company. They might be one and the same. What's going to determine the path of the investment?

K:

To get to where the value is unlocked?

J:

If the stock is twenty dollars today, what's ...