How to Dive Deep Into Investment Knowledge

I suffer periodically from swimmer's shoulder, a form of tendonitis caused by bad technique reinforced by nearly a million repetitions. I know how to correct it, and I have thousands of correct strokes under my belt. But it will be tens of thousands of more strokes before the old neural pathways will be replaced by new ones.

Thanks to the insights of Thomas Kuhn ("The Structure of Scientific Revolutions"), we know that scientists are as vulnerable as anyone to perceptual ruts that inhibit the growth of healthy new connections and new knowledge. Science spends most of its time operating within a paradigm — i.e. the currently accepted way (scientifically speaking) of understanding how things relate to each other.

At some point, however, someone observes an anomaly — something that can't be explained by the existing paradigm. This is the proverbial sand in the oyster. Most experienced scientists perceive the anomaly only as an irritant; they cannot envision the pearl, and thus confirm Max Planck's famous observation: "Science advances one funeral at a time."

Achieving clarity and maintaining perspective in an investment world full of noise and distraction is an ongoing challenge. The acting paradigm when I started working was that successful people were informed people — and so began my daily ritual reading The New York Times and The Wall Street Journal. After a few decades of this practice I was successful and well-informed. But I realized I was no wiser for the experience. Rolf Dobelli, author of "The Art of Thinking Clearly" explains: "The important stories are non-stories: slow, powerful movements that develop below journalists' radar but have a transforming effect. The more "news factoids" you digest, the less of the big picture you will understand."

My brain had been making and sustaining the pathways needed to support decades of my daily reading behavior. "The more news we consume, the more we exercise the neural circuits devoted to skimming and multi-tasking while ignoring those used for reading deeply and thinking with profound focus." Dobelli then poses an important question: "Information is no longer a scarce commodity. But attention is. You are not that irresponsible with your money, reputation or health. Why give away your mind?"

Reading Habits

The decisions we make as investors today have to be relevant within the context of the rest of our lives, which for many of us can mean decades. Over the years I worked very hard to keep clients focused on that critical relationship. But at some point I realized that if my attention, my neural circuitry and my thinking were being reinforced by copious amounts of day-to-day news, I was compromising my own ability to provide sound and appropriate long-term advice.

I decided to change my connection to the news — to make it healthier. Knowledge, perspective, experience and wisdom are attributes built on a broad and diverse foundation, so I didn't have to stop reading the news; I just needed to start reading other things. There was no plan; my curiosity drove my choices. I started to ask friends and acquaintances what they were reading and when something piqued my interest I read it. I didn't put a boundary around this, absorbing news articles, essays, poetry, novels, investing, history, psychology. If I was moved to turn the page, I did. If not, I didn't.

All experience changes our perspective in some way. What I discovered from my unstructured experiment with reading was that seemingly disparate and unrelated things can be connected in profound and unexpected ways. As a result, I might find myself reading something in the daily news, and it would remind me of an idea from a book about investing I had read a few years ago — and that related to something else I had read in a book about evolutionary biology more recently, which was slightly reframed in a book about diet that I had not yet finished.

Like Craven and his motley team, investors are all operating with tiny scraps of data. The lesson from his process is that by spreading a wide perceptual net we can make new, even unique, connections. While we are living in an age of information, what makes that information valuable to us are the relationships we discover within it. Knowing that there are atoms is information; knowing how atoms interact is knowledge.