We often refer to “The Noise” and take it for granted that investors understand the concept.  The other day, I was asked what this noise was… And that simple question made me pause.

We say things like “ignore the noise” so often that it becomes second nature. But for someone trying to make good decisions about their money, “the noise” can feel very real, very loud, and very confusing.

So, I thought it was probably worthy of a more structured explanation!

THE NOISE & THE SIGNAL

• The Noise largely consists of short-term price movements, the media, and political rhetoric.

• The Signal comes from understanding a company’s strengths and weaknesses, competitive position, and what it’s realistically worth.
Companies are considering a much longer time horizon than the media and politicians. There will always be demand for the products sold by companies with strong management, intellectual property, and a competitive edge.

If you do the work to create an investment narrative and calculate the fair value of what you believe a company is worth, you’ll have an anchor independent of the day-to-day price swings for a company’s share price.

This reframes volatility from a threat into a potential opportunity.

LET’S DIG DEEPER

That idea of compartmentalizing the noise is crucial. You’re not trying to block it out entirely; you’re just giving it the right amount of space. Like a barking dog outside your house: you don’t need to engage it, but you should be aware it’s there.

WE’RE WIRED TO REACT TO SHORT-TERM SIGNALS.

Here’s the thing: Humans are pattern seekers. When markets swing, headlines flash, and currencies wobble, our instinct is to do something.

But reacting to every bump, headline, or political comment is a recipe for long-term investment anxiety — and often, underperformance.

WHAT “THE NOISE” LOOKS LIKE IN REAL LIFE

• It’s the financial news cycle pinging alerts about a 1% market drop
• It’s the panic around central banks, changing rates by 0.25%.
• It’s the dinner party debate about a looming crash, inflation, or the newest “hot stock.”
• It’s social media telling you what everyone else is buying (or dumping).

All of it is urgent. Very little of it is important.

THE SIGNAL: WHERE THE REAL WORK LIES
The Signal, by contrast, is where thoughtful investors focus:

• What’s the long-term demand for what this company offers?
• Is it run by capable, disciplined management?
• Does it have pricing power, brand value, and a technological moat?
• How does it stack up in a recession? Inflation? In uncertainty?

Companies worth owning don’t change because a journalist needs a story before the 5 p.m. deadline.
They keep building. Planning. Innovating.
And if you understand their fair value, you’ll see price dips as buying opportunities, not reasons to run.

YOUR NARRATIVE = YOUR ANCHOR
One of the smartest things you can do as an investor is to develop your investment narrative. That means understanding why you’re investing, and what your investments represent — not just in numbers, but in logic. When you assign fair value to something based on fundamentals — and you believe in your thesis, you’re no longer a passenger on the emotional rollercoaster of daily market movements.

You’ve built your seatbelt.

VOLATILITY AS OPPORTUNITY
So much fear around markets comes from misunderstanding volatility.  But if you’re prepared, volatility isn’t your enemy — it’s your moment.  That’s when you get the quality stuff on sale. If you believe in the long-term value of a business or product, then price drops are gifts, which is why we say:

“Volatility reframed = opportunity unlocked.”

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