Perception can be important influence

By DAVID MOON, Moon Capital Management, LLC
July 7, 2013

Perception is an interesting thing. Our perception is closely linked to our thoughts and our attitude. Together they influence every aspect of our lives.

The word “perceive” comes from a Latin word that means “to take possession of.”

When we perceive something, we take possession of it. We own it. It is ours.

I often think that the political system in the US is dysfunctional. In Washington there are government employees who lie to Congress. In Knoxville there are untrustworthy trustees. We argue about poll locations and missing yard signs.

That’s dysfunctional.

A friend of mine, however, just returned from her native Albania, where national elections were held two weeks ago. On election day a candidate for Prime Minister was shot by a supporter of his opponent. The election results couldn’t immediately be certified because the body that oversees elections did not have enough members to qualify as a quorum.

That kind of changes the perception of hanging chads.

Richard and I work together. He sees the good in everything. He doesn’t gossip. He smiles a lot. He gives lots of time and money to charity. He also makes everyone around him feel better.

I suspect Richard is a good perceiver.

People often perceive themselves differently than do others. Of what broad economic class do you perceive yourself being a member? Lower, middle or upper class?

Almost everyone considers themselves middle class.

I know people whose annual income is $35,000 and some who earn $1 million a year. All consider themselves middle class. There are people with total assets between $50,000 and $5 million who perceive themselves as middle class.

My guess is that unless you are on food stamps or own your own jet (not just a prop plane), you probably perceive yourself as some degree of middle class.

Knoxvillians’ perception of the FBI investigation into Pilot Flying J is both divergent and disturbing. Some people see the situation through the lens of their personal experiences with a good and giving family.

On the other end of the spectrum is a disturbing group that seems to revel in the troubles of anyone with more money than them. Clearly they do not perceive like Richard does.

Perception is an interesting thing – and it influences our success or failure much more so than most people realize. Two educated, honest people can look at the same objective set of data and perceive totally different realities.

The stock of electric-car sensation Tesla Motors trades at $115 per share. Elaine Kwei is an analyst for Jefferies. She’s smart, well-educated and has a history of success. A week ago, she increased her price target for Tesla from $70 to $130 per share.

Bill Alpert from Barron’s is another smart guy, privy to the same information as Kwei. He thinks Tesla is worth, at most, $50.

One set of data. Two people. Two wildly different perceptions.

What separates great investors from good ones is their ability to look at the same facts that everyone else looks at and see something that no one else sees. That is, their perception.

David Moon is president of Moon Capital Management, a Knoxville-based investment management firm. This article originally appeared in the News Sentinel (Knoxville, TN).

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