Want Some Pie?

Do you know anyone who doesn't like pie?  They must exist.  But I can't think of a single soul who doesn't like pie.  Now I am not talking about every pie.  You can have a particular flavor that you don't like.   But I don't know anyone who doesn't like pie.

When you have a slice of pie you have to decide just how much you want to eat.  Believe it or not I have had a slice of pie that was so rich and decadent that I stepped beyond a threshold you might not know exists: too much pie. As I am reaching for that glass of water to dilute the flavor intensity  I realize that a little sometimes goes a long way.

So whenever I take a slice of pie or when I am asked to cut the pie, I have to decide how big of a slice I want to take.

Now I have a deal for you. In this deal you cannot lose. I own two companies. These companies are like pies.  Everyone likes them.  They are both profitable and your involvement with either of them will reap you a reward.  What you have to decide is how big of a slice do you want.

One company has a 400 percent return on investment. The other only achieves an eight percent return. I want to give you a big slice, in fact 25 percent of the first company.  Or if you choose, you can have 5 percent of the other company.  Either way you win.  These are both money making machines.  So which do you choose?  Do you want a big slice or a little one?

If you read yesterday's post I hope you will say I don't know.  You see, you really don't have enough information.  A critical piece of data is missing.  What answer would you want to know before you made your choice?  There are many, but a critical component is the actual revenue or profit of each company.

You see, if you chose the 50% slice, well you just got a lemonade stand.  Your returns will be high but your total gain is limited to the sales of that one stand.  But the smaller slice comes from a company whose profits are in the millions each year.

I have encountered situations where individuals reach conclusions with minimal and insufficient data.  This isn't unusual.  We couldn't do anything if we had to wait until we knew each and every fact before we made a choice.  But making a choice and reaching a conclusion are two very different animals.

When we jump to a conclusion and stick to it even in the face of additional contrary data we make our world smaller. We still get some pie.  But we are probably getting a large piece of a very small pie.  All things being otherwise equal I would rather have a smaller piece of a large pie than a large piece of a much smaller pie.