Worth Reading

As regulars are well aware, I don’t provide linkfests, largely because others do it so well (such as Tadas Viskanta at Abnormal Returns, Joe Calhoun at Real Clear Markets, Barry Ritholtz at The Big Picture and Josh Brown at The Reformed Broker). But once in a while I highlight a piece that I haven’t seen elsewhere — though I could have missed it — that I think is particularly good. 

This interview from a week ago with the always terrific Michael Mauboussin at Compounding My Interests is outstanding. I encourage you to read it all, check out the links embedded therein, and then read it again. Here’s a snippet.

So as I think about the synergies between the worldviews, a few thoughts come to mind. First, it’s essential to provide your mind with good raw material. That means exposing yourself to a lot of disciplines and learning the key tenets. It also means spending time with people who think differently than you do. 

Second, you have to be willing and able to make connections. What are the similarities between disease and idea propagation? What can an ant colony teach me about innovation? What do physical phenomena, such as earthquakes, tell us about social phenomena, such as stock market crashes? You need good raw material to make connections, but you also have to be careful to avoid superficial links.

Finally is the idea of thinking backwards. Munger is a big advocate for this. You observe that something is where it is: How did it get there? Why did it get there? There are some fascinating challenges in this regard right now. We know, for example, that the sizes of cities and companies follow power laws. Why? By what mechanism does this happen? No one really knows, and the prospect of solving those kinds of challenges is exciting.

Mauboussin on the Santa Fe Institute and Complex Adaptive Systems

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