William Shakespeare taught me how to read financial newspapers. My favorite play, Much Ado About Nothing, is well titled, because it is, in fact, a play about nothing. More precisely it's a play about things which might be real, but turn out not to be. In other words, it's a lot like today's media.

I'll spare you the intricate plot, the misunderstandings and misunderstandings of misunderstandings. In the end it turns out that none of the problems was real. The prince really did keep his word. The fiancé really was faithful. The bride's death turned out to be a hoax. All of the problems in the drama came from false rumors and from people's reactions to them.

One way to keep track of these complicated comedy-of-errors plays is to take a blank sheet of paper and draw a line down the middle of it.

In the left column you write facts like "Hero is faithful."

In the right column, you write feelings like "Claudio thinks that she is not faithful."

Winter's Tale, Much Ado, Twelfth Night, whichever of the misunderstanding comedies you read, you'll find this a helpful tool. If Shakespeare is too advanced for you, try it with old re-runs of Three's Company, if even that's too difficult for you, best to stay away from markets, and (for safety's sake) refrain from operating heavy machinery.

Next time you read a newspaper, I want you to try the Much Ado about Nothing Analytical Tool. In the left column you put sentences with stats based on an actual count of something real - jobs, dollars, interest rates, prices. Quotes, if they are substantial, go in the left column too. Actual events like hurricanes, elections, wars and terrorist attacks are definitely left column material.

Your right column is for sentences with words like 'worries', 'concerns', 'expectations' or 'believes'. Unattributed quotes go on the right, as do short quotes. Opinion polls go on the right. This includes opinion polls masquerading as economic stats like consumer confidence, or business confidence. Elections and futures markets, however, go on the left. 'Sub-prime jitters' is a left column thing.

Now step back and compare your two columns. The first column is a glimpse, however incomplete, of the world as it is. The second is a glimpse, no matter how distorted, of the world as people perceive it.

There is almost always a gap between the outlook of the two columns. Eventually the right column catches up with the left, as reality gradually forces itself into people's minds. In the meantime there is a gap between fact and feeling - a zone where you can see the world clearly and see just as clearly how public opinion is clouded by emotion. That zone, my friend, is where leaders are made.

When perception is more gloomy than reality (as it has for the past several years), effective leaders invest. When perception is more cheery than reality, effective leaders walk away. Buying in the midst of a panic (or selling in the midst of a mania) can be a very uncomfortable place to be, and the longer it takes for the crowd to catch up the more painful it is. But don't worry, as the Bard said in another context, "Truth will out."

Originally published on TCS Daily.

Jerry Bowyer: Columnist NROFN and DefenseCentralStation.com, Author of The Bush Boom, Founder of Verity Forecasting, Instructor at Duquesne University's School of Entrepreneurial Studies, Afternoon Host on 101.5 WORD-FM radio, TV Host of Focus On the Issues