After months of reading headlines that John Paulson's perspective on gold had not changed, we suddenly read that he had cut his holdings significantly.
Just three months ago, he was quoted as saying that his thesis remains intact, but then we find that Paulson tactically adjusted his portfolios and reduced his gold position. What gives?
While one might be tempted to conjure up scenarios where words do not match actions, we think it's more a function of examining current conditions and making a new decision. And that is the risk associated with reading headlines and making investment decisions based on the latest comments from anyone: Those opinions can change, and they often do.
The market is quite irrational. Gold has become the flag bearer for an environment with less predictability. Gold used to be a fairly predictable trade against inflation and volatility. Now gold trades based on Federal Reserve comments, interest rates, fear, hedge fund liquidity needs, etc.
(Read more: With Paulson's exit, is the worst over for gold?)
It's quite a puzzle to figure out and one we as an asset manager have decided not to attempt to decipher.
In many ways it's no different than the sentiment-based trading around Apple.
The company still has over $100 billion cash in the bank; the stock in the last 12 months has gone from $700 to $390 to $500, and nothing really has changed on a fundamental basis. This position is trading based on expectations and sentiment, and we expect this to continue in the short term. Long term, Apple will trade based on fundamentals; short-term and trades on mood and feeling; not terribly rational inputs.
The market trades based on data, current perception of that data and future expectations. And institutional as well as individual investors either know that fact and invest accordingly, or they are subject to these rapidly changing trading conditions and are victims.
(Read more: Breaking Buffett: The Oracle has underperformed)
This is why it is important to understand the time horizon is key when determining your investment strategy.
If you are a short-term investor you better have a pretty good handle on mood and sentiment. If you are a long-term investor you better have a pretty good concept of the fundamentals and trends that will affect the asset you are investing in.
And perhaps most importantly, remember that when you read headlines or hear interviews that opinions change and often do. Use interviews, columns, insights and protestations from those in the media as information to consider but not gospel and certainly not permanent ideology.
This means that in the end your opinion matters as well as well as your interpretation of others' viewpoints.
(Read more: This might be when the market returns to normal)
So the next time you read a headline that a prominent investor has adjusted a strategy after making previous statements about the wisdom of a particular course of action, remember that perspectives change.
Just because you read it or hear it doesn't mean it's permanent, and you should assume that every opinion that you hear is subject to adjustment prior to relying on that view when you make an investment decision.
Michael Yoshikami is the CEO and founder of the investment committee of Destination Wealth Management.