Note: This post was originally published in the August 2015 issue of Value Investing Almanack. To read more such posts and other deep thoughts on value investing, business analysis and behavioral finance, click here to subscribe to VIA.
“See, when you want to reverse the car to left, you have to turn the steering wheel to the left,” I told my wife while I was trying to teach her reverse parking.
“But when I turn left, the car is going towards right!” she exclaimed.
“No! The car is going towards left. See, the left tail lamp is going left,” I showed her in the side view mirror.
“Yeah but the right headlamp is going towards the right,” she pointed towards the right headlamp which appeared to be moving towards right from driving seat. Of course, it had to. If you are focusing on the front, the nose of the car will seem to go towards the right.
“But why are you focusing on the front head lamp? When you’re reversing your point of reference should be the tail lamp,” I explained.
“Then why didn’t you explicitly tell me that before?” she asked almost in complete frustration.
“I thought you would…” I started mumbling but before I could complete that sentence, a light bulb went off in my head. Eureka!