How have you developed wisdom?
I’m curious of people’s thoughts on the important of wisdom, how you have developed yours, and how you think about it in relation to becoming a great investor.
By wisdom I mean a few things (i) the ability to avoid classic human misjudgment (ii) understanding what’s important to a problem (iii) being able to understand incentives and other agent’s own biases and accordingly discount information appropriately.
There’s a perennial debate around what makes a great investor, and I think this is one of the most important pieces. In my own journey of developing as an investor I’m shocked when very senior and successful investors say things that don’t make sense if you step back and think about the claims/arguments.
I think often we conflate an investor’s success with being a good investor, but I think many factors can make someone a good investor (luck, organizational structure, etc.). We often see very successful investors blow up from misjudgment.
There are great books on this topic and related: Poor Charlie’s Almanac, Seeking Wisdom, and Range.
I’m curious if people agree with me, disagree on the whole or parts, have anything to add, or have recommendations for developing this almost unteachable quality of wisdom which requires commitment, training, a sound mental apparatus (e.g., control over emotions, or at least recognition of intense ones and their effect), and practice.
What have you seen (either good or bad in others), how have you developed your wisdom, and where do you have room to improve?
Reading my Bible and praying every day.
“Blessed is the one who finds wisdom, and the one who gets understanding, for the gain from her is better than gain from silver and her profit better than gold. She is more precious than jewels, and nothing you desire can compare with her.”
- Proverbs 3:13-16
Listening to different perspectives
Befriend in my professional life & personal, finding older people i want to emulate and get their perspectives, hear life experiences, etc. can talk to your parents too..
whynotyou.info is my personal blog.
Basically belief, faith, and borrowed confidence.
you use AI to write - i read the fasting and third eye essays and it's very high in AI content
Taking a lot of risk and hard knocks as a young person. Lots and lots of them.
As well as dealing with the consequences of my actions.
Also, reading Charlie Munger's book and watching interviews with him in it; in his 30s, Munger was broke, lost his son, and his wife divorced him. Reading his book and watching interviews of him during a time when I was dealing with similar rock bottom circumstances in my 30s allowed me to both climb out of the abyss and unconsciously develop wisdom and mental models so that such tragedies never occur again in my life.
The school of hard knocks. Trying to learn from my mistakes objectively.
Also, over time, actually applying an ethical framework on my life and actions.
making mistakes and observing others making mistakes and learning
As a macro investor, I developed market wisdom through study and practice.
Throughout, I was constantly (if implicitly) running a SWOT analysis of my macro approach and developing a strategy for evolving it. I've also learned from managing my PA and tracking my recommendations over time. As a rule of thumb, I try to reinvent my approach every five years by incorporating fundamentally new elements - eg within five years, I expect to be fully systematic. If I'm perfectly candid, I would've liked sharper peers and mentors during parts of my career so that I learned more from them - but a lot of my investment wisdom has been self-taught.
Moreover, I know "pain + reflection = progress" (Dalio's version) is a popular aphorism, but I think you learn as much from gains as from losses. The trick is to constantly scrutinize your process and performance and be brutally honest with yourself whether you're operating in the 'good process, good performance' quadrant.
I realize my answer speaks as much about process as philosophy (wisdom), but the former is a tangible manifestation of the latter. Ultimately, wisdom is strong 'inference' from all of the above 'training'.
Wall Street
Wisdom is simple.
I don't think none of the points i - iii you listed need wisdom
classic human misjudgement is just trained by repetition, looking back at decision you made and assess what parts where emotional and cognitive deficient and try to be more careful in the future
ii is also repetition and exposure to such problem to the point that you know what actually matters, if many people value different things, then repetition, again, will give you an indicative idea on what points people are most concerned about the problem and you'll just need to clarify which one they care about
iii has a game theory element to it, where you assess different scenarios that deviate from the rational actor model and factor in biases, so you develop a broader understanding of when another agent deviates, what the possible reasons might be, and, more importantly, how you should respond
no offense, all the books you listed are bullshit, they just are best-sellers on actual psychology research (e.g. half of Seeking Wisdom is basically derived from Thinking Fast and Slow)
Dicta maiores debitis incidunt ratione. Sed voluptas fugiat qui tempore voluptatem consequatur. Non repellendus nulla at dignissimos maiores dolores. Accusamus dolorum quia in maiores. Ipsa ex molestias accusamus occaecati atque itaque.
Tempora ut ab pariatur ut distinctio nisi blanditiis. Laborum expedita eos porro iste laudantium error similique. In labore iusto et. Illum quibusdam quidem aut aperiam minima dignissimos.
Suscipit quo voluptas neque facilis et expedita. Sed quia hic placeat voluptate quia. A saepe sunt hic corporis molestiae doloremque nesciunt. Aut neque eum odio.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...