It doesn’t make sense

This morning, I was listening to a recent podcast of Tim Ferris (Becoming the best version of you). I didn’t really expect to get specific investment wisdom out of it. Around minute 27 however, Adam Robinson starts answering the question whether he blocks any particular things in his agenda.

After mentioning lifting weights, cycling and doing heart rate variability training, Adam continues that he writes down what he expects to happen. The key to investing is to have expectations and then wait to be surprised.

When reading/thinking he is looking for:

• things that don’t make sense
• things that are really obvious

Examples are given: gold, Trump, Mongolia and US interest rates. Be sure to check them out on the podcast. I especially like – and thinking about – the concept of things that don’t make sense (but are taking place). 

He continues by stating that understanding the world is an illusion and that having a full explanation is impossible. He watches other investors who attempt to make sense of the world.

Those investors:

• form views and try to predict
• are making buy/sell decisions that drive asset prices

As Tim Ferris complements: don’t play the hand – play the  person across of you.

I guess this is related to Keynes beauty contest:

“It is not a case of choosing those [faces] that, to the best of one’s judgment, are really the prettiest, nor even those that average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees.” (Keynes, General Theory of Employment, Interest and Money, 1936 – Wikipedia)

And Howard Marks 2nd level thinker concept from his September 2015 letter (It’s not easy).