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Compounding Knowledge
71–80 of 181 posts
Re: Compounding Knowledge
#72Earlier quoted context omitted.
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.
Warren Buffet is an outlier among outliers. Clearly there are things anyone can pick up from his approach. I think I'd struggle to keep everything in my memory :-) but I think there is a lot to say about the kind of knowledge that one should seek to acquire. On reading I read also on Farnham Street that Charlie Munger reads quite broadly I wonder if it is the same with Mr Buffet
Same here, my memory is one of my worst attributes. If you ask me about tasks I've done last week, I might have trouble remembering them (or any details) without looking up Jiras.
I get the argument of compounding knowledge, though. It should still apply to someone with bad memory. For instance, if I know that I'll be switching my career in about 3-5 years, won't I throw away a great deal of my knowledge and skills? Why do something like this in the first place? This goes in the same direction as focusing yourself on one thing and one thing only (in your career).
Re: Compounding Knowledge
#73Earlier quoted context omitted.
That's if you limit the scope of the article to IT only though. If you extend the scope to your entire life it's vastly different. It's easy to feel smart because you have all the (written) knowledge of the world at the tips of your fingers at any time. I know people who constantly talk about articles they read earlier in the day, etc ... information get diluted from 10s studies, to an article, to a recap of the arti…
Actually, I find having a superficial knowledge of a lot of topics pretty useful as well. It opens perspectives, and opportunities. And there is not enough time in a day to read everything, listen to everything, watch everything, practice everything. Shortcuts are fine. But as you say, "It's easy to feel smart". That's the real problem: you don't know what you don't know, and you should not get cocky.
> It opens perspectives, and opportunities.
I completely agree on that, but as you said, there is just so many things to read / watch / learn, and it's so easily reachable that we often end up with "choice paralysis".
I don't have a crystallised opinion on the subject but instinctively I'd argue that picking a few topics and getting a good in depth knowledge of them is more valuable than splitting your attention span on so many things that in 10 years from now you won't really have anything to show.
Personally I see that as any other kind of distractions, it's easy to hop on from topics to topics, learn the absolute minimum about it, get our quick fix of dopamine making us feel good about "learning something" while you haven't actually learned anything valuable and will most likely forget about it in the next days or weeks. Not saying that we should avoid that at all cost, but it's nice to be aware of it.
Edit: seems like I could end all my posts by a quote from Seneca.
"Accordingly, since you cannot read all the books which you may possess, it is enough to possess only as many books as you can read. "But," you reply, "I wish to dip first into one book and then into another." I tell you that it is the sign of an overnice appetite to toy with many dishes; for when they are manifold and varied, they cloy but do not nourish. So you should always read standard authors; and when you crave a change, fall back upon those whom you read before."
https://en.wikisource.org/wiki/Moral_letters_to_Lucilius/Let...
Re: Compounding Knowledge
#74Buffet’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…
Controversial take: Buffett is actually not a great investor in the way people think. Via the float in his insurance companies, he receives a 0% infinite maturity loan to plow into the market. That financial leverage gives him the ability to beat the market year after year - not his own stockpicking prowess.
If you were to start with $1B, then get an extra $2B that you never had to pay back, you too would do quite well holding Coca-Cola and other safe companies with moats. Your returns would be 3x everyone else's.
Buffett himself has tried to explain the impact of float on Berkshire Hathaway but it never seems to sink in with people.
Re: Compounding Knowledge
#75In today's world things like "2 week sprints" or "move fast and break things" are considered cool. Not many people get the luxury of spending too much time on a topic unless of course you are Warren Buffet. The world around you pushes you or steals yours attention all the time.
Re: Compounding Knowledge
#76If 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.
You make solid observations but there are good explanations for this.
1) Investment opportunities are inversely related to the size. Buffet has constantly warned shareholders that as the size of the company grows, it becomes harder and harder to find good investments. Assuming he can analyze only fixed number of companies, we should expect that there is less potential companies to buy. Buffet has changed his investment strategies several times to reflect changes in his opportunities.
2) Timing. BRK is a company with incredible patience. If you compare SP500TR and BRK over decades, you notice that BRK makes permanent break from SP500 during stock market crashes and long recessions. During stock market booms BRK starts to lose to to the inflated market prices.
We are currently riding on the top of 10 year stock market boom. BRK is patiently buying companies with long term steady profits. For example, Buffet is buying energy companies and electricity transmission businesses all over the the west. These companies are geographically linked and there will be benefits from smart grid investments in the future, especially if the future is solar.
Re: Compounding Knowledge
#77why “being able to quickly google the answers to questions” is inferior to “learning, knowing and remembering the answer At least in the world of programming, this is not necessarily true. There is so much flux that you do need to rely on Google for the semantics at least. In some instances or in time crunch, it is a make or break scenario and how fast one can get to a solution trumps everything else. So the ability…
Understandable that you’d want to exploit any resource that can give you answers during a time crunch.
But if given enough time, going through the pain of debugging and fixing something on your own – with at the most some documentation – is still superior.
If one has learned, knows and remembers the first principles of their domain, then knowing what to Google becomes less valuable (not saying your colleagues don’t know their stuff). You can rely on yourself for even the trickier situations you get into.
Re: Compounding Knowledge
#78Buffet’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…
And, you can get a lot of the benefit "for free" by just buying BRK.B shares, without all the pain of drinking cherry coke all day and reading SEC filings.
Re: Compounding Knowledge
#79Buffet’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.
I have previously concluded the same about him having Aspergers. From what I've read of him, he sounds quite strongly Aspy.
Re: Compounding Knowledge
#80Buffet’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…
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