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Compounding Knowledge

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Re: Compounding Knowledge

#31

Post by melling »

Brigadirk wrote: post #9
stakhanov wrote: post #2

I wonder to what extent Warren Buffet is Warren Buffet because of how he thinks and acts (like all of these non-fiction authors selling books by using his name would have us believe), and to what extent he is the product of media selection bias. -- If you take a large enough group of people who take risky stakes that are large enough (like the world of financial asset management), then one of them is bound to be as s…

I can't find the quote, but Buffett himself addresses this somewhere by saying that while you can get very lucky in finance, if the lucky ones all come from a particular city (Omaha) with a particular philosophy, something might be up.

He’s talking about value investing.

The markets are supposed to be efficient and you can’t beat them.

Re: Compounding Knowledge

#32

Post by personlurking »

collyw wrote: post #28
vp8989 wrote: post #16

Earlier quoted context omitted.

There is also, practically, a massive gulf between: 1) Being vaguely aware that something exists and knowing you can Google for it. 2) Having such a deep, intuitive understanding of said thing that you can actually use knowledge of that thing to solve complex problems.

You can google for two, no? Seems like a good deal of my job as a software engineer.

The new way to "google" something might become the next gig market.

"The next gig economy will be on-demand knowledge" (2019)

https://qz.com/work/1527544/the-next-gig-economy-will-be-on-...

Re: Compounding Knowledge

#33

Post by sametmax »

keiferski wrote: post #10

This concept is essentially the reason why “being able to quickly google the answers to questions” is inferior to “learning, knowing and remembering the answer.” The former treats a piece of information as an independent, context-free item, while the latter allows you to “digest” the information and understand the answer at a deeper level, to the point where it changes the types of questions you ask. Unfortunately ou…

There is a balance here.

Yes, I'm incredibly more productive in Python because I know the stdlib and most frameworks and tools API by heart.

But it took me 10 years of practice, and my daily rate is way more than it used to be. I'll also refuse a lot of gigs outright.

You want juniors to be able to work too, and you can't expect them to know the entire world. Yet they can be useful, worth the money, and a great addition to your team.

Besides, even I don't know all the answers. I can't. The field of IT moves too quickly. I have to select what to learn, and what I set aside as "something I can google". There is no other choice, because we are limited in time and space.

But beyond that, you may want to sacrifice efficiency in some (or many) areas to preserve your energy, divide it in several activities, or just keep it to do something else that is not learning related.

Re: Compounding Knowledge

#34

Post by pasta »

I strongly believe that compunding knowledge is also helping to create good software.

And I think software companies should give a team the opportunity to invest time to know more about the subject.

For example when you write WMS software you should go to a warehouse and see what is going on, talk to the people who work there and understand why things are the way they are.

Because there is a huge difference between knowing that 1+1=2 and knowing why 1+1=2.

Re: Compounding Knowledge

#35

Post by throwawaymath »

melling wrote: post #31
Brigadirk wrote: post #9

Earlier quoted context omitted.

I can't find the quote, but Buffett himself addresses this somewhere by saying that while you can get very lucky in finance, if the lucky ones all come from a particular city (Omaha) with a particular philosophy, something might be up.

He’s talking about value investing. The markets are supposed to be efficient and you can’t beat them.

Indeed, they're supposed to be.

Re: Compounding Knowledge

#36

Post by yetihehe »

collyw wrote: post #28
vp8989 wrote: post #16

Earlier quoted context omitted.

There is also, practically, a massive gulf between: 1) Being vaguely aware that something exists and knowing you can Google for it. 2) Having such a deep, intuitive understanding of said thing that you can actually use knowledge of that thing to solve complex problems.

You can google for two, no? Seems like a good deal of my job as a software engineer.

If you know what to google for. It happened many times to me that I was unable to even know what/how to search for something or didn't know someone already solved that problem in ingenious ways and every specialist knew that, but I wasn't a specialist.

I'm a programmer but when I watch machining videos on YT I discover solutions to problems I've never thought would exist.

Re: Compounding Knowledge

#37

Post by smileysteve »

boombust wrote: post #12
cm2187 wrote: post #3

Earlier quoted context omitted.

Except that he has been consistently successful over a very long period, unlike, say a Paulson who one could claim got lucky in 2008.

While you are right, I think the parent's idea if that with a large enough sample, even if every actor is making decisions randomly, you will get actors that will just crush it. I mean Warren Buffet invested in Apple about a year ago based on the idea that they have a sticky brand and went so far as to say that iPhones were underpriced (which is just flat out wrong given how poorly they sold relative to predictions).…

On Apple; on a 1 year timeline APPL beats the S&P 500 by 5%. But I don't think Buffett measures his investments on a 1 year timeline; and to be honest to your comment, he made the underpriced comment on Aug 31, 6 months ago.

"I do not focus on the sales in the next quarter or the next year," he said. "I focus on the ... hundreds, hundreds, hundreds millions of people who practically live their lives by it [iPhone]."

Apple does continue to boost services income, keep cash on hand, pay dividends, and do share buybacks, all with a P/E below major utility stocks -- things Buffett traditionally considers.

Disclaimer. Apple Shareholder

Re: Compounding Knowledge

#38

Post by adamlett »

boombust wrote: post #12
cm2187 wrote: post #3

Earlier quoted context omitted.

Except that he has been consistently successful over a very long period, unlike, say a Paulson who one could claim got lucky in 2008.

While you are right, I think the parent's idea if that with a large enough sample, even if every actor is making decisions randomly, you will get actors that will just crush it. I mean Warren Buffet invested in Apple about a year ago based on the idea that they have a sticky brand and went so far as to say that iPhones were underpriced (which is just flat out wrong given how poorly they sold relative to predictions).…

Warren Buffet would be the first to tell you that how the market prices an investment on any given day, has very little to do with the intrinsic value of that investment. Just because Apple went down relative to when he invested, that doesn't mean it was a bad investment. Markets go up and down in unpredictable ways. As they say, in the short term the market is a voting machine, in the long run it's a weighing machine.

By this time, I think it's become clear that Apple's disappointing results were entirely caused by the macroeconomic conditions in China and nothing else. Certainly not because of increases in their product prices like you speculate.

Re: Compounding Knowledge

#39

Post by thesausageking »

If his knowledge were compounding, we'd expect his performance to getting over time, not worse. But that's the opposite of what happened.

He's underperformed the S&P 500 over the last 10 years. And it's been decades since he's been able to match the great returns he had very early in his career which he built his reputation on.

Re: Compounding Knowledge

#40

Post by SquishyPanda23 »

iambateman wrote: post #30

Buffet’s approach to life is interesting for the same reason an Olympic gymnast is interesting. He has specialized to an extreme and is taking advantage of the rewards of that specialization and natural talent in a unique way. It’s easy for me to feel shame that I don’t read 8 hours per day, as Warren and Charlie do. Buffett is a phenomenal investor but by all accounts, rather odd. He eats like crap, doesn’t exercise…

The way you describe it, he kind of sounds like a person with Aspergers with business as his special interest.

Not saying that's what's going on. I don't know much about Buffet, but it sounds like some people with Aspergers I know that have other interests (mainly science).

Personally, reading about the same thing 8 hours a day sounds like a dream job to me.

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