Flattened
How Opportunities Appear at the Intersection of Perspectives
The modern investor swims in information. Much of it second hand (i.e., priced). Yet despite the abundance of data, analysis, and commentary, the range of interpretation often feels surprisingly narrow. Everyone seems to be explaining the same market through the same lens. In other words, from a fixed viewpoint.
More often than not that lens is based on the screaming headline(s) of the day. Interest rates explain everything. Or artificial intelligence. Or inflation. Or geopolitics. Each explanation feels persuasive and authoritative.
The problem is not a lack of information, but the incompleteness of that information. It is what the comics scholar and educator Nick Sousanis calls “flatness.”
OK, so what can a comic scholar teach us about how to avoid being flattened?
The Problem With Flat Thinking
In his remarkable graphic book Unflattening (Harvard University Press), Sousanis explores how modern institutions often train us to perceive the world through a single dominant framework.
The condition he terms “flatness’ emerges when one method of analysis becomes the default, alternative viewpoints fade from view and complexity collapses into a single narrative. Flat thinking arises from overconfidence in one dimension of explanation.
We can see flatness appearing consistently in markets:
“Rising rates will crush equities.”
“Artificial intelligence will destroy software companies.”
“China reopening will drive global growth.”
Each statement contains a kernel of truth. Yet markets are not single-variable systems. They are layered ecosystems where economics, sentiment, policy, technology, and narrative interact simultaneously.
When investors compress these layers into a single story, we flatten the world.
The Obvious Model of Investing
The “obvious” model of investing assumes something deceptively simple:
Markets respond to the most important variable.
Find the variable and you understand the market.
Which demonstrates the appeal behind explanations such as:
“Stocks follow interest rates.”
“Growth stocks follow liquidity.”
“Energy prices follow geopolitics.”
This approach is seductive because it produces clarity. Analysts can draw straight lines between cause and effect. But as we all know, reality rarely moves in straight lines.
Markets are influenced not only by events, but by how investors interpret those events. Expectations, positioning, and narratives frequently matter as much as fundamentals themselves.
The result is that markets operate in multiple dimensions at once. Reducing them to one variable is the intellectual equivalent of viewing a three-dimensional object as a shadow on a wall.
Unflattening the Market
Sousanis uses the idea of “unflattening” to describe the act of integrating multiple vantage points simultaneously. Understanding improves not by choosing the correct model, but by expanding the number of perspectives we hold.
In investing, this might involve combining:
Fundamentals - revenue, margins, competitive dynamics
Macro forces - interest rates, liquidity, fiscal policy
Behavior - investor sentiment and positioning
Narrative - the story investors believe about the future
Each perspective reveals something different. More importantly, none reveals the entire system. When these layers intersect, the picture becomes far more informative. And occasionally, something interesting appears.
Where Great Investors Live
Many of the most successful investors instinctively operate in this multidimensional way, even if they never describe it in the language of “unflattening.” Consider a few well-known examples.
George Soros built his philosophy around reflexivity, the idea that investor beliefs influence economic outcomes. Markets do not simply reflect reality; they interact with it. Prices shape expectations, which shape behavior, which feeds back into prices.
Ray Dalio developed a framework of economic “machines” that integrates policy, debt cycles, politics, and monetary systems across multiple time horizons.
Stanley Druckenmiller has long emphasized the synthesis of forces. Liquidity, technological change, capital flows, and positioning are each influencing forces, as opposed to a single analytical model.
Howard Marks captured a similar idea with his concept of second-level thinking: the recognition that what matters is not merely whether something is good or bad, but whether the market already believes it is good or bad.
Finally, Charlie Munger famously urged investors to develop a “latticework of mental models,” borrowing insights from multiple disciplines rather than relying solely on financial theory.
Each of these approaches rejects flatness. Each seeks to view the market from more than one angle at once.
Where Opportunity Actually Appears
The most obvious market stories rarely produce the most attractive investments. By the time a narrative becomes dominant, it is usually already reflected in prices.
The real opportunity tends to appear somewhere else: at the intersection of perspectives. Where fundamentals diverge from investor expectations, narratives diverge from positioning, policy shifts collide with prevailing assumptions.
These intersections are often uncomfortable, primarily because they resist simple explanations. But they are also where markets occasionally misprice reality.
A Practical Exercise in Unflattening
OK, so how does this help? When evaluating any investment idea, it can be useful to pause and ask the questions that matter most. Examine the situation through four distinct lenses:
1. Economic Reality: What is actually happening in the business or economy?
2. Investor Belief: What does the market believe is happening?
3. Positioning: Who is already committed to that belief?
4. Feedback Loops: Could market expectations reinforce or destabilize reality?
If all four dimensions align, the opportunity may already be fully priced. But when they diverge, something more interesting may be unfolding.
In the end, investing rarely rewards the person who gathers the most information. It more often rewards the one who sees the same information from more than one direction.
Flat thinking searches for the single explanation. Unflattened thinking looks for the intersection where several explanations meet and occasionally contradict one another.
That intersection is rarely obvious. But it is often where the opportunity lives.
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