Noise vs. Information

I have good news! No, I did not save a lot of money on my car insurance (actually I shopped those folks few years back, and found that I am in good hands where I am).

The good news is that I have just completed the biggest upgrade to my Adaptive Strategies software since I wrote it over six years ago, and the results are really exciting.

As you may remember, each day, we download pricing on 195 securities into the Adaptive Strategies software and it tells us what is happening in 70 different markets and industries. Because of this program I don’t have to pore over the Wall Street Journal, or decipher every word reported on the financial news station. In seconds I get beyond all of the “noise” published in the media and see what truly IS.

Noise is a not-so technical term for all that important sounding stuff that really doesn’t mean a thing in the long run. What I have realized over the years is that most of the information we receive is not meaningful at all and some of it is downright damaging if relied upon.

Have you ever tried to discern what will go down in history by watching the nightly news? Well 99.9% of the news will never make it into the history books. It is just not important. It is what I call noise. Only that tiny fraction of the news that is significant is what we should be focusing on, but how does one separate the noise from the true information. It is hard to do at close range, when things are first being reported with attendant sensationalism and sales pitches. It is much more effective to wait for the passage of time to see what turns out to be truly important.

However, in business, we don’t have the luxury of waiting to see how things will turn out. So, we need another way to separate the noise from the information. That way is our Adaptive Strategies program. In seconds I can see which segments of the market are moving up and which are moving down and at what rates.

In the six years that I have used this program, new classes of investments have been created that give us much greater access to international and industry specific investments. These have been added to the Adaptive Strategies program, along with indicators that will literally change from green to red to signal us that changes are occurring. It is still up to us to interpret these changes, but the refinements to the program put a vast amount of information at our finger tips that was not as readily available before.

Our active management programs established their fine reputation in the terrible markets of 2000-2002. We know they can keep us out of trouble. We also believe that these new improvements can help us do even better in up markets as well. We know we will have lots of both kinds of markets in years to come, and now we are better equipped to serve you than ever before.