Analysis Paralysis

Analyst - one of the formidable position in the world of investing. The job of analyst is to gather data and information pertaining to certain investment deal, put it into organized manner on a more comprehensible scale for investor to judge rationally whether or not to go with the deal. Analysis provide impersonal facts and justification for decision making. It a way of investing against speculative method. It is believed to be a logical method to eliminate, ideally all the risks with maximum reward - a perfect plan.

Back in 18th century to mid 20th century, to be a analyst is a privilege for only big institutions such as banks. Information were difficult to be accessed. It's belongs only to certain small group of manipulator - those who are rich and powerful. Then, after the cold war, and the Berlin's wall came down, world wide web went up. Today, the information age enable almost everyone to be their own analyst. Information is there to reach by plug in a Ethernet cable and a mouse click. The problem now is not where to get the information, but too much information. Just to separate between useful one from the non-useful one, takes a lot of time, despite the powerful computer leverage we possess. Other, is obsolete information where the world is moving so fast today. The answer yesterday are no longer valid by tomorrow. Our mind have to think as quickly as the world is moving or else we will be left behind. From supply and demand, market psychology, trend, consumer pattern to legal structures; it eat up brain cells of most investor to analyze a deal. As top down analysis is the what the prevalence way of most investor choose today, it often lure them into a paralysis pattern. With overwhelming information to be processed, they end up never ending processes. By the time old information is digested, they have to invite new information to be cross check. Imagine how exhausted you will be, while finding an answer for yesterday, but do not sure whether it will be useful today. It is like living in the shadow of yesterday forever - analysis paralysis.

Therefore, to avoid being trapped into analysis paralysis, one should consider innovation of analysis. Bottom up is good for small investor who wanted to start small by narrowing down the economy scale, for instance a city to a small town. bring in a team to leverage the brain power will be another feasible idea to do the analysis effectively. Finally, one should not look for the perfect result, but a guideline according to what you are looking for and your conditions. By counter off some detail, with greater detail to others, one can come with a optimum risks to rewards result, which depend of each individual situation. Analysis is never designed to eliminate 100% risks or making a perfect plan, but to create a pictures on how things will work out with given certain risk to reward ratio.