Technology is amazing — and is advancing at breakneck speed. We're blessed with an amazing array of both data and the computing power to make sense of it.
Indeed, some estimates suggest that 90% of all of the world's data was captured just in the last twelve months.
Whether that's true or not, there's no escaping the data-rich world in which we live — and the never-ending 'drinking from a fire hose' nature of our connected lives. Indeed, that's precisely our job at Motley Fool Share Advisor — helping our members focus on the right things, rather than trying to take in everything.
When it comes to investing, there's no shortage of data and tools at our fingertips.
Instant share price data, charting software, price history, company financials, investment views (including from yours truly), company news, macroeconomic data and international market ebbs and flows are but some of the combination of information and capabilities that are there to help — and potentially overwhelm — us.
Lots of noise, but little value
That list really doesn't do it justice. Academic research has detailed 5,000 different 'technical' indicators that some investors use to try to work out what to buy, what to sell, and when.
You can subscribe to real-time share price data, use a variety of trading techniques and there's no shortage of brokers trying to convince you that activity (or hyperactivity) is the secret to success.
By the way, that academic research I mention suggests that none of those so-called indicators is a reliable way to earn a market beating return.
That is, despite all of the data, all of the processing power of modern computers and despite an industry devoted to convincing you to 'Don't just sit there, do something', there's no clear sense that investing returns have been improved as a result.
And that really shouldn't be surprising. The very foundations for sensible investing were codified in the days before not only desktop computers, but before computers at all.
And some of the great investors (including the greatest of all time, Warren Buffett) made their marks before as well as during the computer age.
Even those greats whose investing exploits were demonstrated in the modern age hardly seemed to rely on computing power, per se, though it's undeniable that accessing and sorting information is much easier today than in decades past.
Nobel prizes and a collapse
Moreover, one of the most spectacular financial collapses of modern times was of a company known as Long Term Capital Management — a business chock full of nobel laureates and computing power, and whose models told them that the very things that bought them undone simply couldn't happen. They did.
It's probable that the seeming simplicity of the computer age, and the confidence of those who would sell us a dream based on the power of a single laptop, isn't so much a clarion call of simplicity, but instead is the Sirens' song, risking us being shipwrecked on the rocks.
The reason is simple: great investing hasn't changed in over a century. It is simple, even if it's not easy. And the secret, at least in the view of Buffett and others, exists not in gaining extra information, or even in knowing more than the other guy (or girl).
The secret, instead, comes not from the 'what' but from the 'how'. Investing well is about understanding and controlling your temperament. Putting the odds in your favour. And keeping your emotions well and truly to one side. That's how we invest here at Motley Fool Share Advisor.
Patience is a virtue
As I said — simple, but not easy.
So next time you reach for a spreadsheet or (God forbid) a chart to help you make your investing decision, stop and think instead.
What do you really know about the business? What are its chances of success? What are the real risks and opportunities? And is the price you're being offered a fair one, giving you a good probability of a long-term market beating return.
In most cases your answer will be 'I don't know' — and the more often you say that, the closer you are to investing well, because you'll be keeping your powder dry for the really attractive opportunities.
Don't just do something, sit there…
