The Bottom-Up VS The Top-Down Approach
hive-167922·@takhar·
0.000 HBDThe Bottom-Up VS The Top-Down Approach
I thought long and hard to find a natural analogy to the top-down and bottom-up approach but I couldn't pick up any. The closest I found is water falling from the sky to germinate the seeds and the seeds then growing upwards towards the sky. If we keep in mind the natural virtuous cycle that more trees attract more rainfall then the dynamic becomes mutual. However, that's not the case with these two approaches which are usually seen in contrast to each other. Where top-down is like a pyramid structure, bottom-up is more like a straight line. Personally and professionally, there are many instances in which things are addressed and solved from either of the two approaches. And in this post, I explore them(i.e the approaches) from a personal perspective in doing our tasks and when it comes to investing.  [Image Source](https://www.pexels.com/photo/bottom-view-of-sky-view-through-modern-building-5568329/) ## Detail Oriented In essence, the bottom-up approach is detail oriented in which intricacies are taken into consideration and usually handled in a step by step process. As the name suggests, the focus is on the roots and building a strong foundation before venturing upwards. When it comes to personal tasks, this is the person (definitely not me!) who sticks to a routine and solves problems in a systematic way. If the task is to write a thesis about the current geopolitical scene, he/she will start right around the nature of the situation, how it has progressed over the years and what could come next. If it's investing, the bottom-up approach isn't sold to investing in Bitcoin or Tesla stock because of the idea of Bitcoin as digital gold or Tesla revolutionising industries. That's too macro level, it'll rather focus on the micro level. Focusing on the fundamental and technical analysis before deciding whether or not to invest in a particular investment. ## Vision Oriented The top-down has an almost superior advantage to the bottom-up approach in that it usually requires less work. Generally, the bottom-up means starting at the bottom and going all the way up. Where as, in the top-down approach, you don't necessarily have to go all the way down. You can *direct* the way down from the top. Since it is vision oriented, there is an overview on things. In their personal tasks, this is the type of person that will focus on the most important ones and leave the rest *to sort out themselves*. In the assignment on the geopolitical scene, you'll find them musing about the whys of the current scene, trying to get into the minds of the major players involved. They're all macro level when it comes to investing. If they had the option, they'll go all in on Bitcoin with the premise that in their mind's eye, they can imagine the moment Bitcoin flips Gold in market cap and what effects it will bring. Of course, and how much profits they will accumulate at that time. ## Conclusion After this short exploration, it doesn't seem to me as 'approaches'. It rather looks like a way of thinking and doing things that we default to based on our predisposed qualities. Perhaps, the top-down and bottom-up approach helps put some context to it. The main difference between the two is that top-down usually requires less work and there's more room for chance. With bottom-up, there's less room for chance and it usually requires more work. I'm tempted to say that one is better than the other but let me just present it 'as it is'. <br>*Thanks for reading!! Share your thoughts below on the comments.* Posted Using [LeoFinance <sup>Beta</sup>](https://leofinance.io/@takhar/the-bottom-up-vs-the-top-down-approach)
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