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Innovative versus Derivative Thinking

By: D. Stewart Armstrong

-- Posted Thursday, 8 December 2005 | Digg This ArticleDigg It!


and how it can affect your investing strategies


I’d like to discuss a concept with you that receives very little attention, yet affects our everyday lives in a dramatic fashion.  I’m referring to thinking and the process of thinking. This is not an easy topic to cover because it involves the mind and the way it functions; a complex and totally idiosyncratic mechanism if there ever was one.  Every person is unique as is everyone’s thinking.


Of course thinking is a natural process but much of that process is learned. While genetic intelligence factors may vary greatly from individual to individual, we can all learn to think more constructively, in a more positive fashion, and in a systematic problem-solving manner. So don’t believe for a minute that changing the way you think is impossible. It is done everyday and the results can be simply astounding.  And of course, your style of thinking affects the way you deal with your finances and hence it affects your investment strategies.


A Clarification of Terms


First, let’s offer a clarification of terms. Innovative thinking is exactly what it indicates—it’s original, unique, and fresh. Derivative thinking on the other hand, stems from innovative thinking and as such is a rehash of the “same ole, same ole”. It is thinking that is lacking in originality and imitative. It is a repeat of what we’ve learned in the past and a regurgitation of the ideas of others. Too often it is a regurgitation of facts, or worse, what others perceive as reality and have presented as facts.


Now of course, most thinking is derivative and I don’t mean to berate it. I would simply encourage original thinking when the opportunity arises.  Before we begin to think in an original fashion we have to recognize our current way of thinking so identification of our own behavioral patterns is important. If we never challenge ourselves, or follow blindly in the path of others, then perhaps a review of our own cognitive methodology is required. We need to understand ourselves before we can initiate changes in our own patterns of behavior. It is certainly worth the effort because self knowledge is one of the first steps towards positive personal change.


We learn from others, we read, we filter information, and we are affected by the world around us. This is normal and it is of course how we all begin the process of learning which centers around the process of thinking.  All the great scientists, philosophers, engineers, moms, dads, and children, started out by learning from others. Parents, schools, teachers, friends, business associates all play a part in our development.


 Thinking and Intelligence


There is an acute misconception that the higher the level of education the more innovative our thinking becomes. In a perfect world, that would be the case. Unfortunately, much of the primary educational process in the western hemisphere centers on a regurgitation of facts. What year was the US Declaration of Independence signed?   What year was the Federal Reserve founded? What is the capital of Nevada? That type of thinking is carried forth into adulthood. That type of educational process doesn’t teach us to reason; only to learn by repetition and regurgitation. A well rounded education involves language, truth, and logic combined with self knowledge and the ability to reason. And a truly educated person is always involved in the process of learning how to learn. Education is a never ending process and in many ways it is our life’s work.


Our western educational system is based on a multiple choice foundation. The reason for this probably has to do with the very nature of mass education. The ability of teachers to grade a large number of students is based on simplicity. Multiple choice and regurgitation of facts is as simple as it gets. When teachers have to read and grade 35-50 essays, it takes up time and makes them think! But we’ll leave that debate for another day as many educators are recognizing this pattern and endeavoring to change things so that kids do learn to think for themselves and challenge the status quo.


Again, the importance of the concept of thinking transcends all aspects of our daily lives. Consequently, it affects the way we deal with finances, wealth, and of course, the way in which we invest our money.


Taking this process one step further,  thinking affects the way we view politics and individuals as a collective unit ultimately affect the national consciousness. That in turn affects how (and how many of us) elect our state, local and national politicians and how they in turn deal with education and learning. The last thing the US wants to be doing at this point in time is sacrificing educational concerns just when we need innovative thinkers in the worst possible way.


We all should strive to be independent, innovative thinkers, especially when it comes to our finances, our politics, and our relationships.  This doesn’t mean we have to be the next Einstein, Descartes, Nietzsche, or Newton. This means that we should endeavor to solve problems in our daily lives in an innovative fashion.


There are two points I would make here. One is that thinking, real innovative thinking, takes effort. It is so much easier to sit back and listen to someone else’s interpretation of the facts and follow like a puppy dog would follow its master. The other point is that it is never too late to learn to think for ourselves. Yes, old patterns will need to be broken, and at times old friends will need to be left behind. But if we learn to think for ourselves, the rewards will be enormous and the self-confidence established by such a process will be on-going and exponentially radiant.


Give a man a fish and you feed him for a day; teach a man to fish and he can eat for a lifetime.


Solving Problems, Accepting Responsibility, and Self Esteem


Original thinking is most important when we need to think for ourselves in a certain positive way in order to solve specific problems. We don’t want to learn by rote. We don’t want to solve problems by rote.  We want to learn to think things through and attack problems from an innovative angle. We need to begin the process by realizing that we will accept responsibility for those innovative thoughts and for our own actions.


This is a very important concept because how we deal with responsibility impacts how we deal with money, how disciplined we are at investing, and more importantly, how successful we are at it.


Do we listen to others and then blame them if those investments turn sour? Do we sabotage ourselves and always find a way to lose money? Are we afraid of success because we are still dealing with parental-child issues that have never been resolved? Are we risk takers and don’t know it? Do we set ourselves up to lose or to be taken advantage of because of self esteem issues? Do we use money as a front for self esteem? Are we good at making money but lousy at keeping it? Are we frugal to excess? Do we confuse gambling with investing? And finally, do we buy high and sell low or sell to early or buy too late? All of these issues are centered on the way we think and the way we deal with responsibility and accountability. All of these issues are also centered on thinking and self-esteem.


Listen, if you’re involved in this “investing game”, and especially if you’re dealing with the junior companies, mining or otherwise, we’ve all suffered through any or all of the above scenarios. They key is do we learn from our mistakes? Are we discovering ways to become more disciplined in our thinking with regards to our investing programs?


If we can learn to identify these flaws or successes within our personalities and then correct or capitalize upon them, we will be much further along the path towards success in our investing programs and in our daily lives.


Thinking is a process, and as such it is ever evolving ever changing.  It is how we solve problems—intellectually, rationally, and emotionally.  Much of that process is a function of what we learned as children, and subsequently what we learned as we went on to higher levels of education. Some of the “smartest” people you know never completed a formal education so thinking and intelligence are not functions of the university system. I would go as far as to say that the higher up the ladder of formal education one goes, the more one is challenged to really think for one’s self and not become exclusively vested in the titles or degrees one is working towards.


Metaphysics and Creating our Own Reality


Metaphysics, according to dictionary descriptions, is the branch of philosophy concerned with the study of the nature of being and beings, existence, time, space and causality.  Now that is a lot to think about! I’d break that down and simply say that metaphysics is how we deal with our own cognitive reality and the threads connecting it to the past, present and the future.


Even though thinking is a process; there are many philosophers who would argue that thoughts are things. In other words, when we think, we can actually manifest what we are thinking about on the physical plane. Great Metaphysicians are those folks who are so controlled in their thinking that they can manifest their own positive reality in a logical and sequential manner.


Now, here is a very important consideration. In actuality, we are all metaphysicians and we all create our own reality whether we realize it or not. When we day dream, we are in actuality thinking about a certain scenario and how we’d like it to manifest. We’ve all dreamt (thought) of the perfect mate, a wonderful relationship, the perfect house, the great job, the business success, and of course financial success.  If we don’t think about something in a cognitive fashion, it cannot exist in our minds on a conceptual level. Unfortunately, the inverse is also true. That is why it’s so important to think constructively and not destructively.


Whether we create a positive or a negative reality is truly one of choice and much of it revolves around the way we think and the way we were taught to think. Many times we have to undo the way we were taught to think and well—think for ourselves!


It can also revolve around the ways we want to think. It is much easier to be a “victim” thereby allowing ourselves to believe that someone or something has “done us wrong”, as opposed to setting ourselves up to take responsibility.  In other words, being proactive and accepting responsibility for our own creative reality is the first step towards being successful at just about anything.  Choose to think with integrity and a positive reality is not far behind. 


I have to clarify the role of “victim” in our lives. Yes, there are times when the forces of the universe just rise up and slap us upside our head and we don’t have any apparent reason as to why. No one has the answers to these kinds of specifics when they occur. Perhaps it is best to take a leap of faith in these types of situations. But on a universal scale, if we can deal with those mishaps in a constructive format with innovative thinking, we will be able to leave them in the rear view mirror much more quickly.  Furthermore, by “setting up” (creating in a metaphysical sensing) conclusions to a positive reality that accepts personal responsibility “up front” as opposed to “ex post facto”, we are more likely to minimize those scenarios where victim-hood is an end result.


We Create Our Own Reality


If there is one thing I’d like you to take away from this piece it is that we truly do create our own reality. On the most fundamental of levels, it is our choice whether that reality is a positive or a negative one. We can also learn to change the way we think, thereby altering our reality and making it a positive one. It takes time, effort, and perseverance, but it certainly is possible and such changes are accomplished every day. This concept is applicable to our relationships, our marriages, our children, our projects in life, our education, and of course the way we deal with money and wealth.


I would suggest that we all endeavor to create our own style of positive thinking and manifest our own positive reality.  Whenever possible, allow ourselves the luxury of success without intellectually sabotaging our lives and our relationships.



Thinking and Investing


Now bringing this back full circle back into the realm of finance and investing.


When one is involved in investing hard earned dollars, innovative thinking becomes all the more important.  It is so much easier to take someone else’s word for something, but at the end of the day, they are not the ones responsible for your gains or losses. You are. Listening to ideas that are presented is a perfectly acceptable practice. If you believe a person has integrity, and they offer up an idea or two, it is a good place to begin the process of learning and thinking about what that person is saying; what they are recommending.  But do not accept what they say as “end all, be all”.  Roll your sleeves up, dig in, discover the facts and think for yourselves. Make your own rules, your own agenda and don’t follow those of someone else, even though they are supposed to be experts. Again, at the end of the day, we all have to accept personal responsibility.


The counter argument here is the Enron scenario where a company that held the trust of their employees betrayed them in an unconscionable fashion.


How is that reality countered? I honestly don’t have the answers because whether it is GM or Enron or any of the myriad of pension funds that are currently in jeopardy, there are people who are going to be damaged through no fault of their own.  Perhaps a bit of diversification might be the answer, holding the management accountable, being aware of where and how your fund is being invested and not blindly handing your money over to people that you don’t know might all be part and parcel of ways to combat these scenarios. Bad things do happen to good people but the universe still has a way of maintaining its order.


Along those same lines, I want to add that investing in junior mining companies is a very tricky business. Understand that fewer than one out of a 100 exploration projects ever become mines. Understand that there are four components to a junior mining company that must be met for it to ultimately be a successful venture for investors: Quality management, excellent projects, the ability to intelligently fund those projects and adequate, ethical promotion. It is a four cylinder engine and if any of those cylinders are not working properly you have an engine that will have a very loud “knock” in it!


Time’s Up


My time is up so here are a few tips that may be of help to you:


1.                          For the most part, you have access to the same information as your favorite guru. You may have to read and “wade through” annual reports and SEDAR information, but that is exactly what they do.

2.                          Another tip is to pick up the phone and talk directly to the company in which you are interested. You’d be surprised at how much you can learn if you simply learn what to ask.  Again, it takes effort, thinking, and proactive-ness.

3.                           Keep after it, don’t bet the farm on one deal, and don’t give up when you have a set back or two. Remember also, that investing in Junior Mining Companies is kissing a lot of frogs before you find your prince. This is all the more reason to be an innovative thinker, a successful “problem solver” and one who can learn how to judge these companies.

4.                          In the world of investing, the trick is to stay ahead of the crowd. Don’t be a “lemming”.

5.                          You most likely already know this, but most full service brokers are selling the “company line”. They don’t make money, big money, off of original thinkers.



I want to leave you with the idea of thinking and manifesting success in all elements of your life. We don’t live in a vacuum and we don’t think in a vacuum. It is all interrelated and integrated. Relationships, money, health, integrity, and happiness are all interconnected. Like that four cylinder engine I mentioned earlier, our lives are like an engine, but with a few more cylinders. They all have to be working in “sync” for us to be truly fulfilled. The good news is that through learning to think in a positive creative fashion, we are able to help ourselves achieve the success that we all deserve.


I honestly believe that if we learn to think for ourselves in an innovative and original manner, and help others in the same process, the world will be a better place. There will be fewer misunderstandings, fewer wars, happier people, and brighter futures for us all.


Until next time,


D. Stewart Armstrong

Consultant to the Junior Mining Sector

-- Posted Thursday, 8 December 2005 | Digg This Article


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