Aiming for Worldly Wisdom
Plan beats no plan. Laying out steps to follow or a structure to fulfill makes the execution of the task much clearer and therefore likely to happen. We tend to escape uncertainty. Not physically, but psychologically. The mind arrives at whichever conclusion finds most convenient to fill gaps generated by ignorance.
Overperformance, in general, is necessarily caused by atypical reasoning. Extraordinary results can only be obtained with extraordinary behavior. When investing, the pricing mechanism forces us to compete, even if we don’t intend to, with those who, alongside us, send signals by buying or selling. Both players’ hypotheses clash and the outcome will prove profitable to the person whose premises are most sound.
In this context, it becomes crystal clear that what one has to first work at is on their facts, on the mental tools it counts with. It seems unrealistic to think I can arrive at different conclusions, necessarily needed for outperformance, if the information and mental models I utilize are wide-spread and employed by everybody. Therefore, I need to look where nobody is looking. People generally think this means overlooked industries, but Charlie took it further.
After much thought, I think I will start pursuing worldly wisdom. It just seems too right. I understand, though, that learning cannot be forced, at least not if one wants to make it sustainable long-term. Therefore, I will only go after the disciplines and theories that really attract me. To that end is that I am writing this “to-learn” checklist for 2024. I will try for 20-30% of my next year’s reads are in this line of “big ideas in other disciplines”.
The connection between psychology and investing derived in behavioral finance. I have read a fair bit about the subject, but I will try to go after bigger ideas. Behavioral finance seems to me as a niche and, even though immensely valuable, I need to get in touch with fundamentals. In psychology, my target will be:
Freud’s theory of the subconscious, by completing “The Interpretation of Dreams”. Familiarizing myself with what rules my behavior should prove immensely powerful.
Freud’s book called “An Outline of Psychoanalysis”. I hope this helps me get a better understanding of how the discipline of psychology emerged, its roots.
Carl Jung. Not sure here. I’ll perhaps read The Archetypes and The Collective Unconscious or Modern Man in Search of a Soul. Still don’t know why.
Knowing ourselves is vital for overperformance and it seems impossible to know ourselves without knowing how we are designed. Furthermore, biology is the study of life itself. I suspect there are multiple parallelisms to be drawn between this discipline and others. My target will be:
Familiarize myself with Darwin’s evolution theory. Hope “The Origin of Species” gives me a good glance of that.
All living beings are made up of cells. Hope to get some understanding of what these things even are by reading the “Molecular Biology of the Cell”.
Even though I had several courses on macro and microeconomics, I feel I’m still missing the bigger picture. I, again, need to recur to fundamentals and how this discipline got to be detached from philosophy and politics. My intuition tells me that the best place to start is Adam Smith:
“An Inquiry Into The Nature and Causes of the Wealth of Nations” seems absolutely sublime. Perhaps learning this work’s thesis might help me better understand economics altogether.
The economy is composed of people making decisions. “The Theory of Moral Sentiments” should help me infer what Smith saw as the key drivers of the system.
Finally, I’m not sure if I should read The Communist Manifesto or go for other classics in the economic literature.
Physics is the most fundamental thing, at the tangible level. A good idea might be to familiarize myself with such an element. However, it will be out of pure faith, as I am seriously dubious on how this can actually help me deal with the world. I do think, though, that it will be obvious in hindsight. Charlie used to speak a lot about physicists and how he leveraged theories such as thermodynamics Target:
Newton’s most famous book, the one that unchained modern science, “The Principia: Mathematical Principles of Natural Philosophy”.
This discipline scares me. I will therefore only include this book as initial target.
The above-shared checklist should be a complement of my usual investing reads, though I’ll lower the volume on the latter. If I do at least two of the prior list, plus my investing, literature and history usual reads, I think I’ll be satisfied.
Anyhow, thank you immensely for continuously taking the time to read the articles I publish, most of which I’m sure don’t even make sense. It is not easy to recurrently find the space to do so and I wanted to express my gratitude for it. I hope you received some value or insights from the newsletter and for 2024 to follow that route as well. Finally, hope you have a great year-end!
This was a truly tough article to put together. I have no clue about most of these disciplines and which are the “great ideas”. Work will need to be done and I apologize beforehand if the newsletter takes strange detours in 2024. In any case, I hope that the fact of me sharing about these books in the future get all of us closer to this sky-high ideal Charlie set up. Best wishes for next year!
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