|
PureBytes Links
Trading Reference Links
|
Hi,
About 75% of traders that seek my coaching services can be said to come
with a bias towards a capital (rather than revenue) mind-set or
perspective. This perspective carries with it a set of
assumptions that make many concepts difficult to unlearn and sometimes
engenders obstacles for new concepts to take root.
Of the other 25%, most seem to have a flexibility of mind that makes a
range of concepts easier to share.
An analogy may help - it started with a story told to me by a clean-room
fitter/shop-fitter last year.
We will call him Mike. Mike had a messy divorce, and for a
while was staying with his aunt. We met over a nice
dinner party one evening at his aunts house - I think she was trying to
match-make Mike with a lady friend.
Mike expressed, with some conviction, that he could never understand why
his clients would spend so much money on shop-fitting.
He never complained of course, for it gave him a good living.
But Mike said that he knew from his work and experience, that once the
shop was fitted out, the investment was almost not-recoverable.
Mike explained that, from his perspective, that as each client had
varying colour, style and material and finish preferences, the materials
were of little resale value to another client. Also as each
shop has a differing shape and different dimensions, the shop-fitted
material had little more than scrap value.
I listened with some interest - for I knew nothing of retail
commerce.
From his perspective Mike was probably right. I could see
that there must be a revenue value and it was many months before I had
the opportunity to ask a shop-owner for her views.
Sue, (not her real name) has three shops selling similar household
items. One was fitted out before she bought it and did not do
as well in sales as she hoped. The passing traffic was
up to expectation, even the number of people entering the store was
acceptable, it was just the average customer sale value was 50% less than
in her other two shops - each shop selling very similar items.
It turned out, by coincidence, that Sue had arranged Mike to refit her
shop - at huge expense. Soon after the refit, sales
nearly trebled.
The profits at this shop rose almost six-fold and now this shop
outperforms Sues other shops. Sue was considering a refit in
one of her other shops which has nearly 8 years left on her
lease. Mike apparently advised that the refitting would be
much cheaper at this store, as some existing materials could be re-used,
and Sue apparently intends to proceed after her traditional summer
clearance sale.
The return on the 'dead' investment represented by the shop-fitting was
very good.
Sue has a revenue oriented perspective to investment in
shop-refitting.
------------------
Many traders have a bias, it seems to a capital perspective.
There is nothing wrong with this. Just like there
is nothing wrong with a revenue perspective.
But a greater flexibility of mind does allow for more opportunities to be
perceived.
The majority of traders have a trend-following style. Many of
these perceive close stops as a capital protection technique.
Also profits are seen as capital profits.
So far so good. But if some opportunities require some
limited understanding of a revenue perspective, then these are not likely
to be perceived if the trader is stuck in a capital mind-set.
So one reason for the accept or reject style of thinking may be a
particular mind-set strongly biased to either capital perceptions only or
revenue perceptions only. It is just one possible
explanation - another being just full of ideas.
Like many things in life, a balance provides for more opportunity both to
be seen and to be exploited.
May your potential be realised, Ric.
www.traderscalm.com
Yahoo! Groups Sponsor
ADVERTISEMENT
To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxxxxxx
Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.
|