Highlights and notes from The Knowledge Project podcast (@farnamstreet) Episode #4:
@ShaneAParrish X @jasonzweigwsj on skepticism, reading and decision-making.
🧵
@ShaneAParrish X @jasonzweigwsj on skepticism, reading and decision-making.
🧵
Some context: Jason writes The Intelligent Investor column for the WSJ since 2008. He’s also the author of the book The Devil’s Financial Dictionary, among others.
1/ FIND NEW WAYS TO SAY THE SAME OLD THING
Jason sees his job as saying the exact same thing 50-100 times a year in a way that nobody knows he’s repeating himself
Jason sees his job as saying the exact same thing 50-100 times a year in a way that nobody knows he’s repeating himself
2/ MULTIDISCIPLINARY READING TO SPARK CREATIVITY
Jason’s reading diet is highly diverse. From fiction and poetry to biology and psychology, he deliberately seeks ideas & perspectives from different disciplines to spark new, creative ideas
Jason’s reading diet is highly diverse. From fiction and poetry to biology and psychology, he deliberately seeks ideas & perspectives from different disciplines to spark new, creative ideas
3/ SORT OUT THE WHEAT FROM THE CHAFF
On a internet-based world of information, the biggest challenge for both media companies and the public is how to remove noise from signal.
How to deliver accurate, reliable information in a way that the audience knows it is
On a internet-based world of information, the biggest challenge for both media companies and the public is how to remove noise from signal.
How to deliver accurate, reliable information in a way that the audience knows it is
4/ IF YOU’RE NOT AN SKEPTICAL READER, YOU’RE NOT READING
In a world full of misleading information and propaganda, not being skeptical is dangerous and stupid.
In a world full of misleading information and propaganda, not being skeptical is dangerous and stupid.
5/ WRITE FOR ETERNITY
Warren Buffet’s mentor Benjamin Graham was once asked why he quoted Roman & Greek philosophers so much. He replied “ I’m trying to write not from the perspective of our time, or past time, but from the perspective of eternity”
Warren Buffet’s mentor Benjamin Graham was once asked why he quoted Roman & Greek philosophers so much. He replied “ I’m trying to write not from the perspective of our time, or past time, but from the perspective of eternity”
6/ IF YOU CAN MAKE FUN OF IT, YOU’RE REALLY BEING SKEPITCAL
“The ability to define a term that you’re presented with, in business or in life, in such a way as to make it cynical and funny, is sort of the ultimate measure of your own scepticism.”
“The ability to define a term that you’re presented with, in business or in life, in such a way as to make it cynical and funny, is sort of the ultimate measure of your own scepticism.”
If you can’t make fun of an idea or proposition, you don’t understand the weaknesses of it or of your own thought process.
7/ JASON’S DEFINITION OF BULL MARKETS
“A period of rising prices that leads many investors to believe that their IQ has risen at least as much as the market value of their portfolios. After the inevitable fall in prices, they will learn that both increases were temporary.”
“A period of rising prices that leads many investors to believe that their IQ has risen at least as much as the market value of their portfolios. After the inevitable fall in prices, they will learn that both increases were temporary.”
8/ AIM TO ACT ON EVIDENCE-BASED ADVICE ONLY
Don’t trust other people’s advice nor your own intuition blindly.
Act on facts, not opinions
Don’t trust other people’s advice nor your own intuition blindly.
Act on facts, not opinions
9/ IT HAS TO BE BETTER THAN DOING NOTHING
As an investor, you should do things that are better than not doing anything at all.
Doing nothing has no fees, no taxes.
The benefits of taking any action should be greater than the benefits of not taking action.
As an investor, you should do things that are better than not doing anything at all.
Doing nothing has no fees, no taxes.
The benefits of taking any action should be greater than the benefits of not taking action.
10/ JASON’S DEFINITION OF RISK
“Risk is the difference between what I think I know and what in hindsight will have turned out to be true.”
“Risk is the difference between what I think I know and what in hindsight will have turned out to be true.”
11/ ASK YOURSELF WHAT’S THE BASE RATE?
The best way to minimize risk is not being overconfident about what you know.
Start by asking yourself what’s the base rate and what are the odds that the best possible outcome can actually happen
The best way to minimize risk is not being overconfident about what you know.
Start by asking yourself what’s the base rate and what are the odds that the best possible outcome can actually happen
12/ HOW TO KNOW IF YOU REALLY HAVE AN EDGE
Ask yourself:
1. What do I know that the other people on the other side of the trade are unlikely to know?
2. Why do I think I know more than they do?
No answers, no edge
Ask yourself:
1. What do I know that the other people on the other side of the trade are unlikely to know?
2. Why do I think I know more than they do?
No answers, no edge
13/ HOW TO THRIVE IN A BEAR MARKET
In Jason’s opinion, to thrive in a bear market you need to buy when no one else wants to.
In other words, you need:
- Courage
- Cash
Without any of those two, you can’t buy
In Jason’s opinion, to thrive in a bear market you need to buy when no one else wants to.
In other words, you need:
- Courage
- Cash
Without any of those two, you can’t buy
14/ THE BEST INVESTORS
Jason thinks the best investors aren’t un-emotional, but inversely emotional.
They take emotion and turn it inside out.
Jason thinks the best investors aren’t un-emotional, but inversely emotional.
They take emotion and turn it inside out.
15/ UNDERRATED WISDOM
“In American society we have an unfortunate tendency to ignore people over the age of 75 or 80, when in fact they know so much more than younger people like us... The collective wisdom of people in their 70s, 80s and 90s is massive, and under-appreciated”
“In American society we have an unfortunate tendency to ignore people over the age of 75 or 80, when in fact they know so much more than younger people like us... The collective wisdom of people in their 70s, 80s and 90s is massive, and under-appreciated”
16/ TRUTH HURTS
“Part of being human is to live under all kinds of positive illusions. There are lies we tell we tell ourselves that are good for us: they get us out of bed in the morning.”
“Part of being human is to live under all kinds of positive illusions. There are lies we tell we tell ourselves that are good for us: they get us out of bed in the morning.”
SOME BOOK RECOMMENDATIONS
The complete essays by Montagne
The wisdom of life by Schopenhauer
Skeptical essays by Bertrand Russell
The complete essays by Montagne
The wisdom of life by Schopenhauer
Skeptical essays by Bertrand Russell
