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Investing And Knowledge

By Investing Caffeine. Originally published at ValueWalk.

By Investment Master Class

“.. it seems that neither of us knows anything great, but he thinks he knows something when he does not, whereas when I do not know, neither do I think I know. So it seems I am wiser than he in this one small thing, that I do not think I know what I do not know.” Socrates

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Seth Klarman

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CC Master Class Invest – with permission

“Ask yourself and your analysts what isn’t known.  By doing so, you can get a better feel for the inefficient side of the market as well as the degree of uncertainty affecting the situation”  Bennett Goodspeed 1978

“Acknowledging what you don’t know is the dawning of wisdom” Charlie Munger

Knowing what we don’t know is better than thinking we know what we don’t” Philip Tetlock

“There are a lot of things you don’t know.  You’ve got to be aware of that.  Be honest about what you don’t know”  Bruce Kovner

“We’re blind to our blindness. We have very little idea of how little we know.  We’re not designed to know how little we know.”   Daniel Kahneman

“What counts for most people in investing is not how much they know, but rather how realistically they define what they don’t know” Warren Buffett

“The ability to deal with not knowing is far more powerful than knowing.  That is because there’s way more that we don’t know than we could possibly ever know” Ray Dalio

“You have to know what you know – your circle of competence” Joel Greenblatt

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“There are two kinds of people who lose money: those who know nothing and those who know everything.” Henry Kaufman

“Investing is about intellectual honesty. You want to know what you know. You want to know, mostly, what you don’t know” Li Lu

“Financial assets are like life. There are things that we think we know that we really do know. There are other things that we think we know that we turn out not to know” Paul Singer

“Investing is about predicting the future, and the future is inherently unpredictable. Therefore the only way you can do better is to assess all the facts and truly know what you know and know what you don’t know. That’s your probability edge. Nothing is 100%, but if you always swing when you have an overwhelming better edge, then over time, you will do very well” Li Lu

“I always approach things with the same mindset asking myself “What is it that I don’t know, and do I really know better than the next guy?” Daniel Krueger

“One of the key traits of successful investing is knowing what you don’t know” Christopher Bloomstran

“People chronically mis-appraise the limits of their own knowledge; that’s one of the most basic parts of human nature. Knowing what you don’t know is much more useful in life and business than being brilliant.” Charlie Munger

“I dealt with my not knowing by either continuing to gather information until I reached a point I could be confident or by eliminating my exposure to risks of not knowing” Ray Dalio

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“The first thing you need to understand is how little you know.” Sam Zell

“One of the things I do very well investing is, I gather a lot of information but I never know the whole picture. I have a lot of inputs but never everything and I have to make a decision on incomplete information. And I feel very comfortable doing it. [Indirectly related to his hearing loss...] All my life I’ve had to make decisions based on hearing incomplete information. I have to fill in the blanks a lot… When you’re only hearing two-thirds of what the teacher is saying you either guess what the other one-third is and go with it or basically you’re in real trouble. I just learnt early on to start guessing and I was consistently almost right.” James Dinan

“Warren and I know better than most people what we know and what we don’t know. That’s even better than having a lot of extra IQ points. “ Charlie Munger

“Mark Twain put it best “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so”. Overestimating what you’re capable of knowing or doing can be extremely dangerous – in brain surgery, trans-ocean racing or investing” Howard Marks

“People think my success is due to what I know, It’s not, it’s due more to dealing with what isn’t known that is more effective than knowing.” Ray Dalio

“What you really want to, in investments, is figure out what is important and knowable. If it is unimportant and unknowable, you forget about it.”  Warren Buffett

“Apart from the unfathomable aspects of human psychology, there is never perfect knowledge about the world. Simply put, we don’t know what we don’t know” Leon Levy

“It is not really within human nature to comprehend that you may not know everything you think you know,  and, further, that what you believe in could change on a dime.  When your investments are back-stopped by reasonably-priced tangible assets, the prospect of a change is not very costly.  Not so for dreams.”  Seth Klarman

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Warren Buffett

“The Harvard Professor and bridge-playing expert Zeckhauser stressed the unknown, unknowable, and unique; I think you want to be able to build a bridge from that space. That’s what an insight is. You’re going into the realm of the unknowable by reasoning through it and assessing all the probabilities, and realizing that it’s not path-dependent. There are a lot of outcomes where you can win. That’s how you get comfortable. That is how you look beyond the world’s fixed limitations and your own, those finite outlines and boundaries.” Christopher Begg

“Sometimes when I know that I don’t know which way the coin is going to flip, I try to position myself so that it won’t have an impact on me either way.  I don’t make an inadvertent bet.  I try to limit my bets to the limited number of things I am confident in” Ray Dalio

“We want to eliminate the ‘what you don’t know risk’” Jeffrey Ubben

“I keep a few questions on my whiteboard at all times: 1) What do I really know? 2) What don’t I know 3) How do I learn that?” Christopher Parvese

“A basic rule for stock investors: find out what you know and what you don’t know.  When you deviate from what you know and do best, you usually get into trouble”  Ralph Wanger

“…what I have observed about the really great investors is the simple decisions that they end up having to make by virtue of focusing on what’s important and what’s unknowable.” Tom Russo

“The most important three words in investing may be: “I don’t know.” Having strong viewpoints on a lot of securities, and acting on them, is a sure-fire way to poor returns in my opinion.”  Allan Mecham

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Henry Singleton

“Any time you think you know something others don’t, you should examine the basis for that belief.

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