In the first full length Sherlock Holmes novel ‘A Study in Scarlet’ the brilliant detective’s sidekick, Watson, is staggered to discover that Holmes is apparently not aware that the earth revolves around the sun.[i] Watson cannot comprehend how an astonishingly intelligent individual can be ignorant of such basic facts. Holmes, however, explains that he actively disregards and forgets information that is not relevant to his detective work:
“A fool takes in all the lumber of every sort that he comes across, so that the knowledge which might be useful to him gets crowded out”.
Holmes’ approach provides a useful framework for investors. It is essential that we find a means of cancelling out incessant market noise if we are to behave in a manner that will allow us to meet our long-term goals.
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