Quote of the week:

“It takes almost a lifetime to learn how to do a thing simply.” ― Joseph Mitchell

Training your brain to be more curious

“For curious minds, the fact that the world keeps on changing is a feature, not a bug,” writes Anne-Laure Le Cunff in her latest essay on curiosity of the mind. I agree: curiosity is the foundational trait for independent thinking (and for anyone who aspires to outperform). What’s particularly interesting about the piece—Le Cunff is a PhD in neuroscience—is the idea presented that we can actually train our minds to becomes more curious with a few simple routines, which she labels “the curiosity matrix.” As a related aside, her newsletter—Maker Mind—is essential reading for investors, researchers, entrepreneurs, and executives.

“The good news is, anyone can (re)learn to be more systematically curious in all areas of their lives. Although some studies indicate that curiosity may have a genetic component (DRD4-7R has been dubbed the ‘wanderlust gene’), most researchers agree that curiosity can be nurtured. A first step is to go through the nine habits in the Curiosity Matrix and ask yourself: how habitual are these practices in my daily life? What is one habit I can start building today to nurture my curiosity?”


Long-term vs. event-driven investing

One fundamental truth about the stock market is that no two investors are playing the same game. Every person has different views about the future, which then informs how they think about risk and opportunity. As Morgan Housel once put it, “so much of what we consider investing debates and disagreements are actually just people playing different games unintentionally talking over each other.”

This week, the team at Speedwell Research published an essay on this subject, “If you don’t know what game you’re playing, you’ve already lost.” The piece offers a few smart mental models for how long-term investors should think about quarterly earnings, valuations, and ultimately separating noise from signal.

“It is true that any single quarter’s earnings is an inconsequential portion of a company’s value and the fact that there are so many market participants that act as if otherwise, tends to exacerbate short-term market movements. The conflicting incentives and perverse effect of career risk can create an opportunity for long-term investors as many market participants are acting as if they are short-term investors, trying to profit from changes in perceived value rather than changes in intrinsic value.”

A few more links I enjoyed: 

“If you look at everything with curiosity, and wonder, and love, and hope, you can overcome a lot of things. And I think that’s what people don’t realize. It takes a lot of bravery to be optimistic. It’s easy to be pessimistic. It’s easy to say that things won’t work. It’s easy to say, ‘I’m not going to do that,’ because you don’t have to muster up the willpower.”
“Where is this all going and what port can good capital go in a storm? The world-spanning saturation of software that lubricates the wheels of the economy in a thousand invisible ways adds to the bottom-line prosperity of everyone, but more importantly, the construction and mass-production of highly sophisticated data center networks and computing centers enables fundamentally new technological frontiers, and like any gold rush the highest yields are likely to come from the least-mined regions of new tech development.”
“In this episode, William Green chats with famed investor Bruce Berkowitz, whose Fairholme Fund has beaten the S&P 500 by 529 percentage points over 23 years. Bruce, who was named Morningstar’s Domestic Stock-Fund Manager of the Decade in 2009, talks here about the ups & downs of his volatile career, how he changed his investment strategy after three costly losses, why he likes cash as a kind of ‘financial valium,’ & why 80% of his fund is riding on one stock.”

This information should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the investments or strategies referenced were or will be profitable, or that investment recommendations or decisions we make in the future will be profitable. This article contains links to 3rd party websites and is used for informational purposes only. This does not constitute as an endorsement of any kind. While Nightview uses sources it considers to be reliable, no guarantee is made regarding the accuracy of information or data provided by third-party sources. Nightview Capital Management, LLC (Nightview Capital) is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Nightview Capital including our investment strategies and objectives can be found in our ADV Part 2, which is available upon request.