Lessons from Gladwell

Malcolm Gladwell came into my life when I needed him most, and he's been with me ever since.

Deprived of sleep and numbed by repeated games of peek-a-boo, I pushed my stroller through the neighbourhood. I tried to focus on my friend, a fellow new mom, who was pushing a stroller of her own as she gushed about the latest book she was reading. “The author is brilliant," she said. “And he's Canadian."

I wasn't sleeping anyway, so I got a copy and decided to give it a go.

The next time I saw her, a couple of days later, I was excited: “He's definitely changed the way I think about some things."

Over the years since then, I have devoured book after book, as well as podcasts and articles, from Gladwell. I generally come away with powerful golden nuggets to adapt to all parts of my life, from family to work to finance, and they take on new meanings over time and with life transitions.

Here are my top three “Gladwellian" lessons.

1. Talking to Strangers

“We think we can easily see into the hearts of others based on the flimsiest of clues."

In his newest bestseller, Talking to Strangers, Gladwell talks about how difficult it is for humans to understand strangers. Even those of us who think we can read people accurately can often be influenced by assumptions or lack of context. This can lead to misunderstandings that may have a profound impact on ourselves or someone else. Another way to think of it: Life doesn't have the simplicity of a sitcom, and what you see on people's faces doesn't tell the whole story.

That insight is also helpful when making investing decisions. Without taking the time to really understand a company, you might make assumptions or be overconfident. Try digging deeper, test what you think you know and ask yourself: If I were completely wrong, what might that reality look like?

2. Revisionist History Podcast

"The Big Man Can't Shoot."

Breaking news: In basketball, shooting underhand or “granny style" statistically gives players higher odds of scoring – no kidding. As someone who remembers shooting granny-style free throws in my driveway for a little extra oomph, I was shocked to learn that maybe I was doing it right all along. Guess I didn't have to be a basketball genius to know that I had a better chance of getting a bucket, beating my brother and becoming the driveway b-ball champion of all time with an underhand style.

In his podcast Revisionist History, Gladwell explores why more players don't try it. In a nutshell? It's not preferred because people don't think the approach looks good; some even think it looks foolish. A few strong-minded players have done it anyway, not bothered by social norms, to achieve better performance.

And, yes, there is an investing lesson here. As self-directed investors, we can be prone to following the crowd, otherwise known as a herd mentality or bandwagon effect, but does that really lead to the best results? Are the most popular companies the best ones for you? Try to see past what just looks good. It's key to ask more questions and consider why we think something works. Find your granny shot.

3. David and Goliath

“We think of things as helpful that actually aren't and think of other things as unhelpful that in reality leave us stronger and wiser."

Years ago I would have assumed that, in general,the easier things come, the better. Gladwell challenged my way of thinking. In his book David and Goliath, he explores how facing adversity can help people develop new skills – essentially,turning challenges and perceived disadvantages into hidden strengths. As Gladwell explains, “What is learned out of necessity is inevitably more powerful than the learning that comes easily.”

It's no surprise, then, that appreciating the value of a range of experiences and being authentically inclusive can deliver stronger outcomes. Diversity of thought and perspectives can enhance decisions and teams. It's with this lens that I do my research when exploring a topic, a company or an investment. Reviewing a company's environmental, social and governance (ESG) practices, for example, can give added insight into things like diversity in the boardroom, which can help with my investment decision-making.

This article was featured in our special issue, as seen in the Globe and Mail. Download the full magazine HERE.