The Analyst's Path

Glossary

Variant perception

M8.02 · M9.04

Also called differentiated view, edge.

A view that differs from the market's, held for a specific reason that can be stated.

The concept, associated with Michael Steinhardt, forces a discipline that most research skips: writing down what the market believes and why you believe something else. Without that, the analysis is a description of a company rather than a reason to own it.

The three legitimate sources are better information, better analysis of the same information, and a longer horizon than other holders can afford. The third is the most available to an individual and the least used.

State the market's view in one sentence. Then state yours.