There is an old Wall Street chestnut that goes, “It’s not a stock market; it’s a market of stocks.” Fair enough, but we’ll take a different approach today to complete this aphorism: “It is a market of stories.” Yes, it is stories that vie for our attention, define our realities, and spur us to action. Recent academic work on the subject reveals that the right narrative – ideally one with a strong human element – physically changes how we process information and make us more likely to empathize with and ultimately believe the stories we hear. Too fluffy a concept for you? The research we cite was partially funded by the U.S. Department of Defense’s Advanced Research Projects Agency (DARPA), and when they have an interest in something, rest assured it has a very serious purpose. As for applications in the world of investing, recognizing powerful stories earlier than the pack is pretty much the job description for a nalysts and portfolio managers alike. Just be aware that it is all too easy to fall for one as well.