Categorising People

I work hard at catching myself when I am straying outside of what Warren Buffett calls my “Circle of Competence”. I am not an essentialist. You cannot gather data points on people and classify them into fundamentally impressive or not good enough. An occupational hazard of being a fundamental investor is that you do not actually do any of the work in the companies you claim success or failure on. Like South Africans (in general) did not run the 400m in 43.03 seconds or launch a private rocket. (“But! I protest! We ARE connected to Wayde and Elon’s essence!”) The “Halo effect” is when someone who is good at one thing, is assumed to be good at another. An investor can study a business, and get the impression they know how to run that business. There are some things you only learn with dirty hands. As we gain competence in some areas, we can lose basic competence in others. If we all acknowledged this, maybe it would be easier to engage in lifelong learning. Where everyone we meet is someone we can learn from. We are all mostly incompetent, which is why false confidence sells. Do not buy it.