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A Musical Lesson for Investors and Advisors

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Over a career that spanned four decades, concertgoers have routinely paid a lot of money to hear Phil Smith play the trumpet. The long-time principal trumpet of the New York Philharmonic retired last year to a professorship at the University of Georgia after 36 years in the orchestra. In his first professional audition, while still a student, he won a place in the Chicago Symphony. While still in his 20s, Phil came to New York following just his second professional audition.

“For the past thirty-six years, Smith has presided over orchestral trumpet playing, with a resonant, clarion sound and a reputation for never missing a note,” according to The New Yorker magazine. He has been, inarguably, one of the world’s great performers.

The classical music world is tuned in to Phil’s greatness. Less well-known is that Smith grew up in a Salvation Army family, playing cornet on street corners and in church bands. Phil was gifted enough to make it into Julliard despite having no formal training. His father, a Salvation Army cornet soloist, was his only teacher.

Perhaps surprisingly, Phil never gave up playing with the Army. He still plays with them, often anonymously. As the Associated Press reported, “Philip Smith trumpets for God by the little red kettle, when he can still find the chance. He loves the whole thing: The ‘Sharing is Caring’ sign. The elderly veterans who tell him how Salvation Army volunteers handed out doughnuts during World War II. The young people who stand appreciatively as he hits the high notes in ‘O Holy Night.’”

“You’re terrific,’ one young man told him. “You should play music for a living.”


Sometimes near Christmas Phil would slip out of Avery Fisher Hall after a performance with the Philharmonic, change jackets, and join some Army brass in front of a kettle. He didn’t hear “Bravo!” there. In that context, people who had just paid a lot of money to applaud his virtuosity would routinely ignore him and his music. It was as if he was hiding in plain sight.

In nearly every context and situation, we routinely hear, see and perceive exactly what we expect. No more and no less. Since concertgoers (or more precisely, concert-leavers) didn’t expect a world-class performer to be playing with the Salvation Army on a street corner for free, they didn’t notice when one was doing just that.

Violin Solo

Similarly, the virtuoso violinist Joshua Bell, dressed in jeans, a long-sleeved T-shirt and a Washington Nationals baseball cap, busked for change outside a Washington, D.C. Metro station in 2007, playing some of the masterworks of the classical repertoire on a 1713 Stradivarius for which he is reported to have paid $3.5 million.

Three days before he showed up at the Metro station, Bell had filled the house at Boston’s Symphony Hall, where merely decent seats had gone for $100 a pop. In a concert hall, Bell earns over $1,000 per minute to play before packed houses of adoring fans. But during the three-quarters of an hour that Bell played during rush hour on that January day, one solitary listener recognized Bell. Only seven people stopped what they were doing to hang around and take in the performance, at least for a minute. Twenty-seven gave money, most of them on the run — totaling a meager $32.17.

After each of the six pieces Bell played was concluded, there was no applause or recognition of any kind. Hundreds upon hundreds of people hurried by, oblivious to the proximate greatness.

Almost nobody saw or heard what was right there and available free of charge. They missed greatness by failing to expect greatness or even to consider that greatness might be lurking unawares.

Bias Confirmed

We all like to think that we carefully gather and evaluate facts and data before coming to our conclusions. But we don’t. As I have pointed out many times, we like to think that we’re like judges, impartially and painstakingly examining all the possible evidence before making the best, most rational analysis and determination possible. But we aren’t. We’re much more like attorneys looking for any scrap of plausible evidence or argument that we might use to help to support our preconceived notions, truth be damned.

Indeed, we all tend to suffer from confirmation bias and thus reach our conclusions first. Only thereafter do we gather would-be facts, but even then we only do so to support our prior commitments. We then take our carefully pre-sorted “facts” and cram them into our desired narratives, because narratives are crucial to how we make sense of reality. They help us to explain, understand and interpret the world around us.

They also give us a frame of reference we can use to remember the concepts we take them to represent. Perhaps most significantly, we inherently prefer narrative to data—often to the detriment of our understanding.

This confirmation bias causes us to gather supposed evidence and recall information from memory selectively, and to interpret it in a biased way. These biases are especially strong with respect to issues and for beliefs we really care about. For example, in reading about gun control, people typically prefer sources and interpret ambiguous evidence as supporting their established positions.

Confirmation bias helps to explain attitude polarization (when a disagreement becomes more extreme even though the different parties are exposed to the same evidence), belief perseverance (when beliefs persist after the evidence for them is shown to be false), the irrational primacy effect (a stronger weighting for data encountered early in an arbitrary series) and illusory correlation (by which people falsely perceive an association between two events or situations).

Consider the Joshua Bell experiment again. Hundreds of commuters raced past Bell and ignored one of the musical greats of our generation because stopping and paying attention wasn’t part of their expectations and wasn’t in their plans. He may as well not have been there.

Yet watching the video of the makeshift performance shows that every single child who walked past Bell tried to stop and listen and every single time an adult — presumably a parent — scooted the kid away. Kids have fewer and lesser expectations than we do. Kids have fewer preconceived notions than we do. Often times, quite remarkably, kids pay much better attention than we do.

Much truth (not to mention beauty) is all around us, hiding in plain sight, like Phil Smith and Joshua Bell. We miss it because it’s outside our comfort zone. Or it doesn’t comport to the views we already hold. Or it seems to contradict our ideologies. Or it doesn’t come packaged the way we expect or from a source we expect. Or perhaps it simply doesn’t fit with our view of the world (or the economic cycle, or the markets, or politics, or, or, or).

My besetting sin as an advisor, an investor and a person can seem petty and trivial. It’s that I don’t pay attention very well far too much of the time. But paying sufficient attention is crucial to making sense of the world, the markets and our clients’ needs, goals and expectations as well as holding the key to using that knowledge successfully. If Phil Smith is playing on a street corner near me, I want to hear him. Even more, I want to stop, pay attention and listen carefully. You should too.