Humility. The constant desire to learn so that you can overcome ignorance.
We are only exposed to the information we encounter, only live the experiences limited to our personal lives, and only think of the hypothesis that we can conceive of.
This experience, however, ends up representing nearly 100 per cent of how we believe the world works.
Our lives, however, are too short to collect enough data from our experiences to evaluate the quality of our decisions from the small set of results we experience.
Becoming Rich Versus Staying Rich
Many people achieve success but to sustain the same over an entire lifetime requires humility, gratitude, and a constant learning mindset.
Winning big makes many of us feel invincible, and that feeling entices us to bet big on what worked for us in the recent past. This creates a catastrophic event when the world changes or luck turns against us.
There are a million ways to get rich. But there’s only one way to stay rich: Humility.
The irony is that few things squash humility, like getting rich in the first place.
- Morgan Housel
Humility in Investing
Uncertainty is the most fundamental attribute of financial markets. Living in an imaginary world of certainty can lead to fatal mistakes in the real world of finance.
Approximate statements and different degrees of certainty require us to think probabilistically.
Even in the highest conviction idea, always leave room for doubt.
Operate within your Circle of Competence
Circle of Competence
If you want to improve your odds of success in life, business, and investing, then clearly define the perimeter of your circle of competence and operate only inside it. Over time, work to expand that circle, but never fool yourself about its current boundaries.
Use the inversion technique. Try to know what you don't know, and then draw a circle that keeps those things out.
When you are unsure and doubtful about what you want to do, do not do it.
Read. A lot. That is the only way you can expand your circle of competence.