Oliver B. Adams grew up a poor kid who worked in a grocery store. He wasn’t a clever kid or imaginative. There was nothing special about him. Nothing, except for his obviousness. Yet, that simple trait led him to the top of the advertising business.
Two of his obvious successes stand out. The first was creating a fancy ad campaign for a bond paper company. Adams rushed over to the paper mill to gather the facts. He got a crash course in how the paper was made: the ingredients (white rags), the type of water used, how it was dried, and even the inspection process.
Then the obvious solution for the ad campaign came to him. Adams’s proposed highlighting all the ingredients: “every bond paper is made with carefully selected rags…pure filtered water… loft-dried…hand-inspected.”
The CEO was dumbfounded. There’s was nothing original about it. Everyone already knew that about bond paper. But Adams quickly explained, “I never knew. The entire agency uses the stuff daily and none of us know. Who are you advertising to? Paper makers or paper users?”
The CEO relented and the campaign was a success. By repeating the obvious facts month after month, people came to believe there was something special about that bond paper, over all the others, despite it being ordinary.
His other obvious success was with a prominent retailer. The company had two stores in a large town. The first store did really well, while the second fell short of breaking even. The town was big enough to support both stores, so that wasn’t the problem. They tried clever advertising to boost sales, but the second store still suffered. They needed a better ad campaign quick.
So Adams went to find out what was wrong and figure out a solution. He immediately went to both locations. He checked the signage and window displays, looked at the products being sold, reviewed previous advertisements, counted foot traffic, dug into the books, and thought about the problem…until it hit him.
He submitted his proposal and a few months later the second store moved. No amount of advertising would boost foot traffic and save a store at a hard to find, high rent location.
Obvious Adams, as he came to be called, had a knack for stripping things down to its essential points and communicating it clearly. It was rather simple, common sense really. Almost too simple at times that clients couldn’t believe how obvious it was.
Years later, he was asked why don’t more business people do the obvious then? He replied:
Since I had that name wished upon me I have given considerable thought to that very question, and I have decided that picking out the obvious thing presupposes analysis, and analysis presupposes thinking, and I guess…that thinking is the hardest work many people ever have to do, and they don’t like to do any more of it than they can help. They look for a royal road through some short cut in the form of a clever scheme or stunt, which they call the obvious thing to do; but calling it doens’t make it so. They don’t gather all the facts and then analyze them before deciding what really is the obvious thing, and thereby they overlook the first and most obvious of all business principles. Nearly always that is the difference between the small business man and the big, successful one.
Robert Updegraff wrote Obvious Adams in 1916. The book has been used in advertising as an example to not be overly clever but to break down a product to it’s simplest ideas.
The trouble is clever, ingenious plans are more appealing than the simple, obvious ones. But more often than not, communicating the simple ideas has a bigger impact than some clever, ingenious scheme.
Of course, this idea works in other areas of life, like investing.
Clever and ingenious is no stranger to Wall Street. It’s in the business of creating clever new products to capture returns, so they can capture fees. Most of these solve surface-level problems that fit specific situations. And the products bring clever hidden risks that are even harder to figure out.
And the products end up in sophisticated investment strategies to justify more fees. Why shouldn’t it be so? Markets are complex, so a complex strategy must be the solution to make money. That’s how you get hundreds of thousands of funds pushing factors and alternatives and hedges and hedges on hedges to sell to people.
But investing, stripped down to its basic essentials, is owning a stake in a business’s success. There are many ways to do this, but owning stocks and bonds are the obvious solutions, with offsetting advantages and disadvantages. Stocks allow you to participate in the upside while bonds forgo the upside to protect you from the downside while paying a decent yield.
Does it need to be more clever than that?
Stripping investing down to the essential truths offers nothing sexy or original but its timeless. It’s easier to understand, less difficult to manage, offers more flexibility, and brings fewer hidden risks, which means a lower chance of mistakes.
Simple investment strategies have proven over and over to simply work. Nothing could be more obvious.
- Useful Biases – M. Housel
- Known Unknowns and Share Prices – Albert Bridge Capital
- The Virtuous Investor: Avoiding Despondency and Pride – Klement on Investing
- Five Questions: Tackling Some of the Toughest Questions in Investing with Michael Mauboussin – ValIdea
- Scaling Fallacy in Investing – Safal Niveshak
- Where’s the Buyback Beef? – Irrelevant Investor
- What Black Monday Taught Us – J. Rekenthaler
- The Payoffs and Penalties of Investing in U.S. Active Funds – J. Ptak
- Disrupting the IPO Process: Challenging the Banker-run Going-Public Model! – Musings on Markets
- Gold Fever! The Amazing True Adventures of Jack London in the Wild – Smithsonian
- The Deceptive Simplicity of Peanuts – The Paris Review