The ability to be in the shoes of other investors and feel what they are feeling is an indispensable weapon in the investor’s armory. Paul Tudor Jones, a billionaire hedge fund manager, affirms that it is less important to understand news than to anticipate the market’s reaction to it. The best way to do so is through empathy. For example, in early 1990, Jones empathized with the tremendous pressure Japanese fund managers were under to return at least 8% per year. While it may seem like an aggressive expectation in today’s market, the average Japanese household in 1990 had become accustomed to making at least 8% per year. Any manager who under-performed that hurdle rate ran the risk of losing his job. So when the market sold off 4% in January, the Japanese portfolio managers had a choice: they could keep their jobs and still make the 8% minimum return by reallocating aggressively into bonds or they could take a risk on trying to outperform by buying even more equities. [i] By putting himself in the shoes of the average Japanese fund manager, Jones realized that most of them would not want to risk their jobs. Consequently, Jones correctly bet that the Japanese stock market would suffer a major correction.