Robert Hagstrom is an incredible intellectual CrossFitter

A Connoisseurship in Determining Relevance

Michael Oakeshott stresses that the ability to think, or 'judgement', "appears first not in merely being aware that information is to be used, that it is a capital and not a stock, but in the ability to use it - the ability to use it in answering questions." Until a person displays such an ability, she doesn't have a competence. Or, as Oakeshott's contemporary Ludwig Wittgensten put it, "to understand is to know what to do."

Author and Investor Robert Hagstrom of Legg Mason Capital

Investor Robert Hagstrom has this ability. In spades. There's a great video of him discussing what will immediately be identifiable to any Crossfitter as the mental analog of CrossFit's physical program. He said, "You can't spend ninety percent of your time becoming an expert on physics or biology, because you've got work to do...but you can spend a little bit of time understanding the big models and how they work." Hagstrom points to physics, biology, evolutionary biology and a host of other disciplines as being both accessible and fruitful for study as an investor. And, of course, they're that way for those of us not involved in stock picking and trading, too.

Hagstrom, at about the 2:30 mark in the video above, begins to talk about the case of Amazon, and examined how to value it. Regardless of what he may say he's up to, what he's displaying in describing how he came to value Amazon as he did was a remarkable connoisseurship. Oakeshott and his notion of judgment explains why. "The rules may have been mastered, the maxims may be familiar, the facts may be available to recollection; but what do they look like in a concrete situation, and how may a concrete situation (an artifact or an understanding) be generated from this information?" 

In another post I pointed to Mason Meyer's expert use of taking insights learned from (what is no doubt a rich and rewarding course) Clayton Christensen's Harvard Business class and applying them within the latticework of mental models approach Charlie Munger recommends to anyone interested in becoming wise. But that post oversimplified. Yes, Mason Meyer's ability is impressive. Yes, his example is an instructive as it is impressive. But simply suggesting that it's a good idea to seek out instruction as to when to apply which model and why obscures the process necessary to acquiring judgement. Judgement is precisely the thing that allows Hagstrom to interpret data correctly; it allows him to evaluate whether a given data set suggests a reversion to the mean or whether there's been a trend change that augers something else entirely.

Oakeshott asks the important question in examining this process, "How does [a person] acquire the connoisseurship which enables him to distinguish between different sorts of questions and the different sorts of answers they call for, which emancipates him from crude absolutes and suffers him to give his assent or dissent in graduate terms?" That's the process Robert Hagstrom and Mason Meyers went through to have the insight they need to answer the questions facing them. Only a connoisseur has the understanding required to answer the questions posed by complex systems. Anything short of this is the difference between Max Planck and his chauffeur.

CrossFit provides a workout program that taps into all of the body's energy pathways, Hagstrom's example offers insight into how studying across multiple disciplines may do the same for the mind.

Hagstrom makes so many good and interesting points in that video, many of which are worth elaborating on. In an upcoming post, I'l take a look at whether philosophy is the boon to investing (and other enterprises) Hagstrom suggests it is.