Guest post: How I invest

[steveo73]

I was going to state that there is a lot of validity to how the game changes in martial arts to how the game changes in investing.

In MMA simplistic jiu-jitsu did work exceptionally well in a certain unskilled environment where the overall skill level was really low but that game changed quickly. Royce Gracie was a star and he did something phenomenal but the fighters of today are freaks of nature and skilled across so many disciplines. The best guys are top level stand-up wrestlers and strikers and it's rare they aren't good at ground fighting as well especially in the lower weights.

There is a difference between this and investing though. In investing you aren't trying to be world champion.

Jiu-Jitsu might be a better analogy because you don't have to know every technique, you can develop your own style but most importantly you don't need to compete at that level. I've been doing jiu-jitsu for years and the number of different games is huge.

[Riggerjack]

@steveo73

I chose Shoalin monk intentionally. Not for martial prowess, but because they were a complete cultural package for centuries. They had a history of resolving problems using tools they developed. They had a hierarchy, resource bases, educational system, etc.

So my question is more along the lines of "how does someone properly break out of a cultural knowledge set?" Or does this principle only apply at lower layers?

It didn't occur to me to ask how this combination would perform in a modern sport...

[IlliniDave]

I remember as a kid looking up into the blue sky at jet contrails being amazed at how high the planes needed to be to be invisible to me. That article went over my head at about 5x the altitude of those planes. I feel hopelessly stupid. Lots of interesting individual statements though. Glad to see SWAN got a mention.

[jacob]

Specifically, I perceive the metacrisis as confirmation of the failings of the foundation of our "known" fields.

If by foundations you mean the way that knowledge is divided into specializations, I agree. It's the "Blind men and the elephant"-problem. The Hagstrom book listed in the post specifically addresses this. Once sufficient amounts of different "knowledge" has been uploaded into the same brain (mind), it begins to translate into "vision logic". Wilber's "One Taste" book has a good description of how this differs from Piaget's formal thinking or rationalism (e.g. the lesswrong types).

[Riggerjack]

If by foundations you mean the way that knowledge is divided into specializations, I agree.

No. This is not what I mean. That is about division of one set of knowledge.

My question is about how you think expertise in one cultural set of knowledge gains one an advantage in learning from another knowledge set outside said culture.

With the sub-question of how the perception of "complete-ness" of the first culture influences the way one addresses the second culture.

Obviously, there is low hanging fruit in the 2nd set. But In my experience, the more one "knows" from one's native set, the less one tends to learn from the new set.

And this seems to be the opposite of your model.

[jacob]

My question is about how you think expertise in one cultural set of knowledge gains one an advantage in learning from another knowledge set outside said culture.

From an investment perspective it doesn't. This is why I mentioned the importance of "being slightly less wronger than wrong" and why I kept bringing up the market as an intersubjective ("something we agree on") construct. For example, one can be really good at financial analysis and calculating Graham-style prices. However, this is not going to work in a market that's driven by herd-style bubble informed by "something else" because the value-specialist is going to say that the bid-ask should be 14-15, whereas the herd says it should be 30-31. In that case, the value-investor is shut out.

Knowledge can be arranged in groups and families of similar mindsets (culture). For example, math-based, narrative-based, legal-based, news-based, stonk-based, ... And beyond that e.g. "capitalism-is good"- and "capitalism-is-evil"- sets. Think ESG vs anti-ESG. Feel free to arrange/group however you want. Cluster-algos galore. You can make it self-referential if you want. It doesn't matter what you think or I think. It matters what "we" think.

With the sub-question of how the perception of "complete-ness" of the first culture influences the way one addresses the second culture.

Obviously, there is low hanging fruit in the 2nd set. But In my experience, the more one "knows" from one's native set, the less one tends to learn from the new set.

And this seems to be the opposite of your model.

If an investor is specialized within the same group, it's easier to transition within the group. For example, if your entire skillbase is based on functional programming or Indoeuropean languages, it's easy to learn a different functionally based language. It's just a another language within the same language-group. Different words, more or less same grammar.

It MAY be harder to transition out of the group ("If all you have is a hammer, the whole world is a nail"). OO or Chinese. This depends on how crystallized the mind has become. Going outside the group means not being able to transfer/reuse nearly as many mental models. In particular, if someone is not aware of the influence of their own culture on their mind, they will have a hard time seeing how culture influences thinking. Going deeper, if someone is not aware of how their preference for emoting, rationalizing, abstracting, face-value, ... it'll be even harder.

There are layers all the way down. The more fundamental the layers and the greater awareness one has of such layers, the easier it is to switch thinking codes in order to engage properly with the [intersubjective] market. I'll refer back to Kegan. INCLUDE to transcend. Also SD.

[Riggerjack]

I seem to be questioning in the wrong thread. I'm not asking in context of investing. Investing is merely the context you were using to lay out your thinking patterns and processes.

So I can see how 4th person perspective is useful in a Keynsian beauty contest, and have no questions about that. (But thank you for the link and use case.) But I do have questions about your thoughts on 4th person perspective in a general sense, or in relation to bigger picture frameworks like metacrisis.

Maybe I should put more thought into my questions, and pick this up in another thread.

[jacob]

Maybe I should put more thought into my questions, and pick this up in another thread.

Just lmk if you're asking from a 4, 5, 6th person perspective. It's almost impossible to have a public conversation for all levels at the same time.

[steveo73]

@steveo73

I chose Shoalin monk intentionally. Not for martial prowess, but because they were a complete cultural package for centuries. They had a history of resolving problems using tools they developed. They had a hierarchy, resource bases, educational system, etc.

So my question is more along the lines of "how does someone properly break out of a cultural knowledge set?" Or does this principle only apply at lower layers?

It didn't occur to me to ask how this combination would perform in a modern sport...

Cool. I don't know the answer to your question but I assume that a lot of that ability comes down to the individual person.

[steveo73]

My question is about how you think expertise in one cultural set of knowledge gains one an advantage in learning from another knowledge set outside said culture.

This is actually pretty close to the way I took your question. In that specific instance I don't see much if any cross over. There are some fighters at my gym who are great at striking but not so great at jiu-jitsu. They have an aptitude for striking but not so much for jiu-jitsu. These are physical activities though. I wonder if there is a difference when it comes to learning different things that aren't physical.

[steveo73]

@riggerjack - I had a thought that possibly you are talking about the models that Buffet talks about.