Pennsylvania Investment Observer

Trapped By Our Own Words

by Daniel J. Nestlerode

We have the notion that as people we use language as a tool to express our feelings, state facts, ask for things, make promises, declare our intentions and the like. We study English, from grade school through college, becoming more proficient with our native tongue. Some of us even study and become fluent in other languages. Through all of this we still have the notion that language is a tool that we use. We have the notion that we are in command of the language and that more schooling will give us better and finer command of this tool. But perhaps it is the other way around and just possibly language uses us.

It is a curious notion that language might have some power and that misusing it might cause damage both to ourselves and to those around us. After all, sticks and stone can break my bones but names can never hurt me. Yet in the saying of this simple childhood recant, we must first of all have had some hurt to put up this defense against a name-caller.

Language, regardless of the tongue you speak, has the power to reveal and conceal at the same time. When asked the same question by two different people, we often give different answers depending on the context each person brings to the question. For example, how is your investment portfolio doing? When asked by your spouse, I bet you give a different answer than when asked by a business associate or friend. You illuminate and conceal information with each different answer. Often your answer is couched in general terms that defy quantification. You might say my portfolio is doing great! Or, I really feel good about my mutual funds. Or, you might reply that you just made a bundle on Corning Glass, one of the darlings of the fiber optic network infrastructure industry. At the same time you might not mention how much you have lost in Amazon.com since last Friday.

Through all of this we have forgotten the purpose of language. It is simply to coordinate our actions with each other. It is that which allows us to do as group what we cannot do independent of each other. It is what has allowed us to build our great society and economy and allowed us to take care of each other's concerns. It has lengthened our lives and added immense quality to the lives that we live. It is much more than a tool. It is a very large part of what it is to be human and sentient.

In my corner of the world, investments that is, language plays a particular roll in the creation of financial well-being. Language in the investment community is quantifiable. You can ascribe numbers to the results of your investment portfolio. And the numbers are much more meaningful than how you feel about your investments. To a numerical standard, either your portfolio works or it doesn't. To a standard, either you are a competent portfolio manager or you are not. To a standard, either you have an investment strategy or you do not. To a standard, either you execute your investment strategy with skill or you do not. Putting numbers to your investment portfolio is like acknowledging that there is gravity. Hiding behind "generalisms" and partial replies doesn't quite make the grade in my office. We have, you see, a healthy respect for the power of language. We are committed to the effective coordination of actions.

So, how is your portfolio doing? Just give me the percentage change in value, year to date. Now we're getting somewhere.

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