In Tracy Kidder's The Soul of a New Machine, Tom West informs Kidder that "Not everything worth doing is worth doing well." Obviously, the power of this maxim is its shock value, a rebuttal to a timeworn, and usually quite valuable maxim that anything worth doing, is worth your best shot at making it good. (Because if you don't have time to do it right, when will you have time to do it over?) West and Kidder are passing on a lesson taught through the brutal experience of designing a computer in a race against time: Some things must be great, and some things get in the way of the greatness, and will have to be compromised.
Clearly, one can't know everything, so applying this principle to the acquisition of knowledge is straightforward. The problem is that decisions about what to know, what to learn, where to spend your time can be quite challenging. I have a short story to tell about one of my own recent experiences.
In August 2019, I was reading something online, and encountered an article in The Economist that I wanted to read. Knowing the value of it, I decided to plunge in and subscribe on the spot. I got behind the paywall, read the article (since forgotten), and soon began receiving the paper magazine in the mail.
In June of 2020 I started a program where I tracked the books I was reading, aiming at a minimum of five books per month. Shortly thereafter I recognized a conflict: academic papers and magazines like The Economist were not books, but they would certainly take up the same kind of reading and thinking time that could be allocated to books. By setting a specific goal of completing five books each calendar month, I was impacting both my time and motivation to read other sources.
To solve the problem, I decided that there needed to be an equivalence between a "book" and other materials. In the case of The Economist, I decided that at about 80 pages per issue, two issues of the magazine were very roughly equivalent of one book. Though most of the books I was reading were more than 160 pages, The Economist uses a triple-column format, smaller type, and a much larger page size than most hardcover and paperback books.
Setting the equivalence worked. Though previously I had been making poor use of my subscription, I was able to schedule in more reading of issues of the magazine, and have it count towards my reading program. All was well, or so I thought.
As I continued through October of 2020 it became clear that The Economist was not going to fit. Just keeping up with four issues per month would consume 40% of my scheduled reading, and since the topics were varied and most were outside my learning program, it was actually detracting from my other projects. Worse, I was finding that reading two issues of the magazine was more difficult than reading a single book on a relevant topic. The quantification made it clear that, despite some annoying cognitive dissonance, that The Economist did not fit my life. I cancelled it in December.
The lesson here is not about the quality of The Economist. It is a relatively politically neutral, wide-ranging, well-informed and outstanding article of journalism. Some day it might be worth it to read it at the library, or to search its article repository. For the present, for me, it is too much of a distraction from things that are more valuable.
You are probably wondering what I am reading. In February 2021:
- WEIRDest People in the World, Joseph Henrich
- The Righteous Mind, Jonathan Haidt
- Atomic Habits, James Clear
- The Federalist Papers, Alexander Hamilton, James Madison, John Jay
- The Discovery of France, Graham Robb
If we allow that the efficient market hypothesis is approximately correct, then we can assume that the current stock price reflects what is known about the company. Common knowledge is mostly reflected in the current price. The price of Coca-Cola (KO) is supported by the knowledge that the brand is well known, liked, and nostalgically revered as a piece of shared heritage, and slightly undermined by the knowledge that consuming sugar is a slight detriment to a healthy eating style. It doesn't help us as investors to learn these things, nor does it help much to know the basic earnings and revenue numbers for the last few years. That data is known. It is reflected in the price.
Instead, we are looking for unusual information that the market doesn't know. We are looking for blind spots in institutional investors, normative judgments that are objectively false, emerging science, widespread miscommunications. Some would call that contrarian thinking. More specifically, this process helps you refine how you spend your time, so that you can get a better payoff from the research you do. Though you likely should be aware of KO's revenue, earnings, shares, cash flow, and marketing campaigns, you will find better competitive insights from other places.
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