Velocity or Acceleration

Much of the time we are fixed on the speed of things, which for dogs and others who live totally in the present, is a good thing. However most of the rest of us need to have an understanding of what is going to happen in the future.

Acceleration is the rate of change of velocity with time. To view the future with some accuracy it is important to be aware of velocity but to focus on acceleration.

For example, a helicopter flying at the edge of its power capability needs airspeed or ground effect to stay airborne.  A snapshot of the airspeed indicator will show the speed however watching the trend of the same instrument will show whether the helicopter is slowing down and will be unable to maintain flight.

In finance we are always told through the disclaimer that past performance does not predict future results. This is especially true if one focuses solely on the velocity of the return whereas an examination of rate of change (acceleration) will give a more accurate foretelling of the future.

Focus on the acceleration or rate of change to make better assessments of the future.

In Search of the Perfect Crew