The Wisdom Wall

“Neither can most people. So, so what that says is there is a role for exceptional people, even in an AI world.”

“asking me how to become a second level thinker is like in basketball, we say you can't coach height. All the coaching in the world will not make your team taller. So can you, I can tell you that you must become a second level thinker to be successful as an investor. I just can't tell you how.”

“if you believe that consensus is as close to right as most people can get, then if you tell Claude, I only want non-consensus thinking, then it has a high probability of being wrong.”

“The things that have happened, for example, in the economy and the markets are likely to induce certain behavior in the future, and you can know a little bit about that. And, but when, when the history and the past behavior has been extreme, the ability to infer from that rises.”

“when you look at a portfolio and you see a stock that's down 80%, It's usually because something wasn't covered. And because the, the, the analysis was not disciplined enough to touch all the bases.”

“my answer is that indexation has taken over as it has, not because it's so good, but because active management was so bad.”

“The bad times create an opening for active management. But it's still hard, and not many people can do it well. Why do bad times create an opening? Because panic drives down, let's say, stock prices. But the same panic causes most people to panic, which means that most people can't stop up and buy in the panic. And…”

“So if, if your excitement level, and by that I mean your insight level, is average, you don't have an edge. Your, and you get involved in AI, your performance will be average. You will go along with the tide if it works. You'll be schmeiced if it doesn't work.”

“readily available, quantitative information about the present cannot hold the key to success. Because everybody has it. Success in investing is doing better than others. Investing is a, is a funny field because it's really easy to be average, and it's really hard to be above average. But readily available quantitative…”

“second level thinking or contrarian thinking is not just different from the herd. That's not enough. It has to be different from the herd and better.”

“in investing, you can put together a portfolio rather than one that will produce maximum success. If a certain future unfolds, you can put together a portfolio Which will do fine if several, any of several futures unfold, and not too terribly if a bunch of other futures unfold. Now you can't prepare simultaneously for…”

“history, the things that have happened so far and people's reaction to history have Semi-predictable implications for the future.”

“rather than thinking of cycles as ups and downs, which I think most people do, think of them as excesses and corrections, excesses and corrections.”

“patterns in the, in the, in the real world, the non, non-scientific, non-mechanical world, uh, Certainly aren't regular, but they do occur ups and downs. They do it predictably, but not necessarily predictable in time or predictable in, uh, amplitude, but they certainly occur predictably.”

“I think that most ambition starts with the dollar sign. In enlightened cases, it transitions to non-dollar.”

“If, if, if you go into a field that everybody likes and they like it a lot and have bid up the price, then your returns are not likely to be high. If they, if you go into a field where everybody else has been blind to the merits and says, I wouldn't touch that with a ten-foot pole, and you figure out that it's good and…”

“the base, the most important fundamental skill set is predicting the probability of the fault better than other people. That's, that's where if we don't have that, that's the necessary condition for, for superior performance.”

“This is a competitive game... You don't have to, it's not a matter of being right or wrong. It's a matter of being more right than the other person or less wrong.”

“There are certain themes that re that rhyme from instance to instance in history. And, um, They mostly have to do with human nature. And I think human nature doesn't change incredibly slowly. I mean, when we talk about fight or flight, people will start talking about the, the, the, the, uh, the stone age man and the,…”

“If you have to be right all the time, if there's something in your makeup that recall, that says you're going to be unhappy if you're not right all the time, don't become an investor.”