I don't much care for investing. I don't have much money invested and don't spend a lot of time worrying about the stock market. People who pay close attention to the market, like Mason Meyers, love Charlie Munger. And I think I know why. Because his approach to learning makes people smarter.
Of course, his track record also has a lot to do with it. So does his willingness to share his ideas. People will try almost anything if they think it’ll make them rich. Munger had to trick people into it a little, but he provided a functional set of guiding principles for acquiring wisdom. He was once asked to give a talk on stock picking. There was a reason he was invited to address the topic—he certainly was qualified. But he wasn’t all that interested in ‘just’ talking about stocks. The talk he gave was on the art of stock picking as a subdivision of the art of worldly wisdom.
“That enables me to start talking about worldly wisdom—a much broader topic that interests me because I think all too little of it is delivered by modern educational systems, at least in an effective way,” Munger said. “And therefore, the talk is sort of along the lines that some behaviorist psychologists call Grandma's rule after the wisdom of Grandma when she said that you have to eat the carrots before you get the dessert.
The carrot part of this talk is about the general subject of worldly wisdom which is a pretty good way to start. After all, the theory of modern education is that you need a general education before you specialize. And I think to some extent, before you're going to be a great stock picker, you need some general education.”
He’s right. Picking stocks is hard. There’s a lot of competition. And there are a lot of variables. So people do need to have some more general education.
Munger & Warren Buffett are famous for arguing that people would do well to carve out a well-defined ‘circle of competence’ and stay in it as much as possible. On it’s face, such advice seems like a vapid truism, akin to writing programs with little more to offer than ‘write what you know.’
But investing is so complicated that commanding a circle of competence isn’t easy—even confined to a narrow set of businesses in a small grouping of industries. Fortunately, for investors and the rest of us, Munger's thought extends far beyond investing. His approach to learning doesn’t just lead to wise investment decisions, but more general wisdom. I’m reminded of CrossFit’s recent official tweet: "What we’ve discovered is that #CrossFit increases work capacity across broad time and modal domains. #Fitness." Munger’s approach leads to cognitive, not physical, fitness. But the approach is the same.
And Munger’s thought is so great because it challenges people to question, to dig, and to look to multiple disciplines and to a diversity of ideas for insight and inspiration. (It also helpfully recommends being honest about what we do and don’t and cannot know). Mason Meyer’s piece was helpful in combining Munger's thought with Clayton Christensen’s to determine when and how to use different models. People who follow Munger’s approach learn a lot about investing by learning from other disciplines; and people who follow his approach learn a lot about various disciplines by learning to invest.
After his introduction, the first thing Hecker said was, “I fly in 400 (or whatever) miles to be here, and this is the thanks I get? 200 crotch shots? Some thanks!”
It was hilarious. At least to me as a 14-year old kid. He was cocksure and crass and outrageous. I won’t soon forget it. Another bit of advice that was just as provocative and every bit as memorable. He told us that to improve as shooters, we should shoot with our off-hand. He said, “The more you shoot with your left, the better you’ll understand how to shoot with your right.”
He was exaggerating a little. But, shooting with the opposite hand, for most of us, required that we rethink how to do a task we’d all done thousands of times. It also helpfully allowed the staff to start from scratch and demonstrate our mechanics from the bottom up. The coaches could put the ball in our hands and explain were it should sit, how we should hold it. They could tell us how we should set our feet, everything. Because we didn’t have the built-in experience doing it any other way, they had something of a tabula rasa. And challenging even our best, most deeply held ideas by trying to shoot with our off hands did help us to understand shooting with our dominant hand better.
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| Charlie Munger |
Of course, his track record also has a lot to do with it. So does his willingness to share his ideas. People will try almost anything if they think it’ll make them rich. Munger had to trick people into it a little, but he provided a functional set of guiding principles for acquiring wisdom. He was once asked to give a talk on stock picking. There was a reason he was invited to address the topic—he certainly was qualified. But he wasn’t all that interested in ‘just’ talking about stocks. The talk he gave was on the art of stock picking as a subdivision of the art of worldly wisdom.
“That enables me to start talking about worldly wisdom—a much broader topic that interests me because I think all too little of it is delivered by modern educational systems, at least in an effective way,” Munger said. “And therefore, the talk is sort of along the lines that some behaviorist psychologists call Grandma's rule after the wisdom of Grandma when she said that you have to eat the carrots before you get the dessert.
The carrot part of this talk is about the general subject of worldly wisdom which is a pretty good way to start. After all, the theory of modern education is that you need a general education before you specialize. And I think to some extent, before you're going to be a great stock picker, you need some general education.”
He’s right. Picking stocks is hard. There’s a lot of competition. And there are a lot of variables. So people do need to have some more general education.
Munger & Warren Buffett are famous for arguing that people would do well to carve out a well-defined ‘circle of competence’ and stay in it as much as possible. On it’s face, such advice seems like a vapid truism, akin to writing programs with little more to offer than ‘write what you know.’
But investing is so complicated that commanding a circle of competence isn’t easy—even confined to a narrow set of businesses in a small grouping of industries. Fortunately, for investors and the rest of us, Munger's thought extends far beyond investing. His approach to learning doesn’t just lead to wise investment decisions, but more general wisdom. I’m reminded of CrossFit’s recent official tweet: "What we’ve discovered is that #CrossFit increases work capacity across broad time and modal domains. #Fitness." Munger’s approach leads to cognitive, not physical, fitness. But the approach is the same.
And Munger’s thought is so great because it challenges people to question, to dig, and to look to multiple disciplines and to a diversity of ideas for insight and inspiration. (It also helpfully recommends being honest about what we do and don’t and cannot know). Mason Meyer’s piece was helpful in combining Munger's thought with Clayton Christensen’s to determine when and how to use different models. People who follow Munger’s approach learn a lot about investing by learning from other disciplines; and people who follow his approach learn a lot about various disciplines by learning to invest.
The Barry Hecker Axiom.
A couple weeks ago, Barry Hecker, an assistant coach for the NBA’s Memphis Grizzles, resigned. I believe he was the head coach of my high school’s basketball coach at Westminster College. My introduction to the basketball program at my high school came at a summer camp just before the start of my freshman year. One of the most memorable guests was Barry Hecker. He was working as a scout for another NBA team at the time. Our coach had the 200 or so campers all assemble on the gym floor to hear him. We all sat with our legs crossed facing him.
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| Basketball Guy Barry Hecker. |
After his introduction, the first thing Hecker said was, “I fly in 400 (or whatever) miles to be here, and this is the thanks I get? 200 crotch shots? Some thanks!”
It was hilarious. At least to me as a 14-year old kid. He was cocksure and crass and outrageous. I won’t soon forget it. Another bit of advice that was just as provocative and every bit as memorable. He told us that to improve as shooters, we should shoot with our off-hand. He said, “The more you shoot with your left, the better you’ll understand how to shoot with your right.”
He was exaggerating a little. But, shooting with the opposite hand, for most of us, required that we rethink how to do a task we’d all done thousands of times. It also helpfully allowed the staff to start from scratch and demonstrate our mechanics from the bottom up. The coaches could put the ball in our hands and explain were it should sit, how we should hold it. They could tell us how we should set our feet, everything. Because we didn’t have the built-in experience doing it any other way, they had something of a tabula rasa. And challenging even our best, most deeply held ideas by trying to shoot with our off hands did help us to understand shooting with our dominant hand better.
I have never heard this story before. You make a lot more sense to me now!
ReplyDeleteWhat makes sense? My love for Munger's ideas...or my strange habit of shooting free-throws lefty?
ReplyDelete