Sponsored by

Investing is one skill you simply must master if you want to build wealth without compromising your integrity. 

This doesn’t mean you have to do it all on your own. In fact, you probably shouldn’t. Excellent professionals can save you a lot of time, help you a ton, and prevent you from making a lot of dumb mistakes. 

However, what you cannot do is stick your head in the sand and pretend that you don’t need to know how to invest. 

“Just how does one go about becoming a good investor?” you ask.

It starts, of course, with Socrates. Now, I know it’s common practice for anyone with the slightest trace of Hellenic heritage to relate everything back to Greece but my point here is actually legitimate. It turns out that Socrates’ core teaching—that “I only know that I do not know”—is a key to success, not just in philosophy and life but also in investing and business. 

Why is a stock/asset going up or down? What are interest rates going to be next year? Is Tesla going to dominate the world with robots, brain implants, AI, and autonomous electric vehicles? 

“Who knows!” is the only correct answer to questions like these 

This Black Friday, Tovala’s Smart Oven Is Free—and So Are You.

With Tovala, you’re not just fed—you’re free. Free from meal kit fails. Free from “gourmet” microwaved meals. Free from food delivery that delivers… to somebody else’s house. Free from the time-suck of cooking. Tovala’s smart oven and meal delivery frees you from all of that. And this Black Friday, they’re including their smart oven (a $299 value) for free when you sign up for meals.

Instead of dreading the “What’s for dinner?” question, you can enjoy a freshly cooked meal without compromising on quality, taste, or your precious time. (We think you deserve all those good things.)

With Tovala, chef-crafted meals arrive fresh to your door and cook themselves in their smart oven with just the scan of a QR code.

Don’t sleep on it—claim yours now at Tovala.com and use code BLACKFRIDAY24 at checkout. 

When you study the history of great investors, you realize pretty quickly that while they all have different styles what they share is this Socratic commitment to profound intellectual humility. A foundational common practice for great investors is a kind of ruthless and relentless open-mindedness. This is captured beautifully in Jack Schwager’s “Market Wizard” Series and in the essays and many public comments of Warren Buffett and the late Charlie Munger. 

It’s not at all obvious why intellectual humility is so important to the art of investing. In some sense, you’d almost expect the exact opposite to be true. Aren’t strong opinions and strongly held convictions what you need to win at this wildly competitive game?

In recent times, social scientists and psychologists have gotten really smart about a lot of the quirks, features, and bugs of the human condition. We know more about our minds and how they work than ever before. But for all our modern sophistication, we basically have come to the same fundamental conclusion that Socrates did 2300 years ago:

A human being rarely operates from a purely rational, conscious place. 

As such, we must learn to be really mindful and careful about what we think and believe. You see, we are meaning -making and -seeking beings and our consciousness comes equipped with a costly default feature where we basically can only see what we believe. Only very rarely though, do our beliefs line up with the actual truth. Of course, this causes all kinds of problems for us.

Socratic humility works as a kind of mental hack—perhaps the first of all such hacks which have grown so popular in our times—and its precise aim is to circumvent this problematic default mental conditioning of only being able to see what we believe. The big idea here is that to see the truth, you have to first rid your mind of all your pre-conceived notions and beliefs. Essentially, you have to make room for the truth. 

Unlike Socrates who lived as a pure philosopher and concerned himself with big ideas like justice, excellence, beauty, love, wisdom, good, and evil, as investors we have to make some very practical decisions in the world—Where should we put our capital? What should we buy? What should we sell? When?—and cannot just go around asking questions and watching people fumble their answers all day, although that might be fun. 

No, knowing fully that we cannot know, we still have to make real life decisions. If life is absurd as some philosophers suggest, this is why! 

What, then, are we to do? 

After 20 years in the trenches and more losses than I care to remember, I’ve come to believe that there’s really only one good way to go about making good investment decisions and that is to ask a BUNCH of questions. You start, of course, by getting yourself in that “I don’t know anything” mindset as best as you can, and then just start asking questions across every conceivable dimension of the situation: 

Who? What? Why? When? Why now? What Then? What if? What else? …

And when you think you’ve asked it all, separate yourself from the situation for a while and come back to it again and ask the same set questions all over again.

Does this process sound familiar? It should! An exceedingly thorough examination of a situation with a sufficiently prepared and open mind is the key to arriving at a rational conclusion, no matter what the endeavor. Sadly the Socratic method doesn’t guarantee that you’ll be right but at least your process will have some integrity. 

You might think you are done here but you are not. Once you’ve come to a decision, there’s more work you need to do to keep that “don’t know mind” going and stay honest with yourself. With investing, you’re never really done deciding. There’s a psychological maintenance you have to do once you are actually in an investment that demands that same kind of extreme humility described above.

I discovered this from studying Paul Tudor Jones, one of the best investors of the modern era. In “Market Wizards” he describes how he trained himself to be totally free of his own mind / belief system and the potential for bias from narrative capture. Every morning, he would review his portfolio and ask one, simple question:

“Do I want to own what I own right now?”

And then, and this is the key, he would follow through ruthlessly on whatever answer he came to. If that meant selling everything and abandoning all the hard work that built the portfolio in the first place, then so be it! By doing this, not only did he embrace Socratic humility in an extreme way but also, he trained himself to have the courage of his convictions. This is precisely what it takes to be a great investor!

If you experiment with Socratic humility or Jones’ method in your own investing, I’d love to hear how it goes. Just hit reply whenever you are ready to share. 

Like what you’re reading? Join us on our socials for more content throughout the week. 🙏 Thank you!