They say if you do not know the fish at the table it's you. It's a good way of saying calibration matters. You don't need to be the smartest player if you find the right games. Part of being aware is being able to evaluate where others and yourself sit in a pecking order.
This leads to an interesting opportunity. You may not be the smartest but if you are above average or put special effort into evaluating who is smart you can find ways to draft in their path. I think about this a lot.
Why?
I have been lucky in life in the sense that since college I have probably been in the lower half of the room in aptitude.
(It's not false modesty...in fact I'm super lucky to have that happen -- I got a chance to become smarter and have decent jobs).
Having life not go to difficult for you is part being lucky and part being well-calibrated. The 2nd part is important because unhappiness is usually a gap between expectations and outcomes. (It's worth putting some effort into self-awareness).
In trying to read others to figure out who's smart and therefore good to learn from, I've always been a bit confused by really smart people who hold views I'd never land on. The natural thought here is "what am I missing?"
Of course this is a dead end...
The smartest people don't all agree with each other. So there's a limit to what you can adopt from studying people smarter than you.
The limit is probably right around where a hard problem with a known solution ends.
Like you can trust the smartest people on how something in science works. Like photosynthesis or aeronautics. Basically something provable and fairly narrow in scope.
You can't trust the smartest people on things like how an economy should be organized or what the law should be
Social stuff and emergent human behavior is too complex to be reduced to formulas of what should be (hell we can't even figure out how to describe what actually is)
Of course what should be is exactly the mouth of the river where smart opinions diverge.
The "right" answers are a range as wide as people's beliefs about what the meaning of life is. It's a uselessly wide range.
Which means everyone just talks their book. Maybe not for their own benefit even, but for the sake of coherence to their worldview.
Anyway, these were some random thoughts I had when I was thinking about how smart people are capable of bad takes.
I wrote this post this w/e for my letter:
It might be polarizing but everything is now anyway so here it goes
In @Jesse_Livermore interview he mentions how exceedingly high valuations are increasingly dependent on liquidity or what he terms "networks of confidence".
He refers back to prior work that shows how you'd need a healthy discount to intrinsic to buy an asset you couldn't sell
The fact that you can sell your at an in line price lowers your risk threshold to buy expensive assets.
And we see assets with long durations now. I think of duration as how long it would take to recoup your initial investment. Stocks and bonds have long durations today.
If these long durations are acceptable because we trust liquidity, and the idea that the market will not wake up one day and just reset at much lower multiples, it feels like risk that should be priced in an implied distribution.
This work-in-progress is an attempt to to connect the dots into a cohesive picture of how your financial picture over your life is connected to your daily decisions as well as what you actually do with your time.