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Ask Farnam Street #1

Welcome to the first incarnation of Ask Farnam Streetwhere we’ll be taking and answering questions on anything you’re curious about that we feel we can answer competently and honestly. This first batch of questions comes straight from our Members.

If you’d like to submit a question for our next Q&A, please send it to us at [email protected] with the title “Ask Farnam Street.” We will choose a group of the most thoughtful questions and answer them right here on the site. 

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How do we cultivate a good balance between thinking for ourselves and building our own systems to suit our unique personalities, and learning from what other people have already discovered about the world and the systems they’ve built and shared?

This is a pretty common question in a lot of fields. Almost anyone who goes deep on trying to study the success and advice of others eventually wonders if they’ll just become a clone of someone else. But the truth of the matter is that most do eventually “find their way” – where everything you’ve learned coalesces into a system of your own. Purely aping someone else doesn’t work very well and is harder than it sounds anyway.

Here’s an exercise for anyone who likes music: Pick a musical artist you like and find out who influenced them. Then listen to those influences. Does your favorite really sound like those influences? Like, really? Almost never.

You might hear an “echo” of Robert Johnson in the Rolling Stones, but the differences between the two are night and day – the difference between country blues and rock ‘n roll!

Yet if you were to ask Keith Richards, he’d tell you the Stones started out basically doing a poor imitation of old American blues artists. But what they really did was take the soul of that music (and, I might add, early rock and rollers like Elvis and Chuck Berry), added their own spice and reality, and created something entirely new. That’s how creativity works. You don’t just create new things out of the clear blue sky – you have to start with something. Making new connections and associations is creativity.

Even Sam Walton used to say that he basically stole all of the ideas that became Wal-Mart. But what other company was really anything like Wal-Mart? It was completely unique. And why should anyone else have been like Wal-Mart – they were missing the key ingredient…Walton himself!

In these stories lies your answer. Cultivating that balance will happen naturally if you simply break down what you learn to its essence and take what is useful from it. You don’t need to outright copy anyone else, and contrary to popular belief, success isn’t simple imitation. It’s learning the principles behind what made others successful, the underlying reality being demonstrated by that success, and incorporating that reality into your worldview.

Farnam Street is about pursuing an understanding of “the way the world works.” As long as you use those systems you learn from others as a way of getting at the underlying reality – going beyond pure imitation — you will have the opportunity to “make them your own.”

Two quotes sum this up:

Take what is useful, discard what is not, add what is specifically your own.
Bruce Lee

Any truth, I maintain, is my own property.
Seneca

When Charlie [Munger] talks about knowledge across a wide range of disciplines, what are those disciplines, and which does he appear to favor?

Charlie address this a little bit in a speech called “A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business”.

He’s talking about the basic disciplines that would make up a really good broad undergraduate curriculum: Math/Statistics, Physics, Chemistry, Biology, Engineering, Complex Systems, Psychology, Business/Economics, Law, with the more fundamental ones being generally most reliable. (1+1 always seems to come out to 2.)

Charlie seems to have made use of models across all disciplines. He probably uses psychology and biology more than most, which is a great lesson. And clearly he and Buffett have made wise use of probabilistic thinking.

But remember, in his own words, “80 or 90 models carry most of the freight” – in other words, you’re looking for the Big Ideas. Something like compound interest from mathematics or incentives from psychology explain a large fraction of what you see around you. And you always have the ability to generate new models that you think are explanatory, accurate, and memorable — that’s part of the fun.

An accurate and fluent understanding of the big models of the world should be your “first principles” — the large trunk and branches on which all of the “leaves” of your knowledge will hang. Without a big solid trunk with big solid branches, what kind of tree do you expect to have?

From there, it’s about synthesizing across the disciplines — understanding where they overlap, conflict, and combine. What do the models in biology and business have in common? What does the concept of entropy have to do with practical life? Well, a great deal. But you have to reach a bit to figure it all out. And as we talk a lot about here, you eventually find that everything seems to be connected to everything else.

Remember, all models are abstractions of reality. George Box put it that “All models are false. Some are useful.”

Reality itself is simply one continuous, flowing entity, but we as humans have to work with our natural apparatus to understand it. Dividing things into little sub-disciplines is one of the ways we go about doing that. Just remember that your end-goal is to understand reality as best as possible; unfiltered and unadulterated. Any way you decide to organize your search for reality must take into account the way humans learn, but always remember that you’re abstracting reality.

How do you choose what next to read? Do you randomly pick a book off the shelf or do you let what you just read pull you towards something that it referenced so you can go deeper into a topic? Do you just wake up in the morning and say I feel like learning about.. this! and go for it? 

It’s a combination of a lot of things, but basically the underlying principle is always to follow what interests you, right now. We discuss this a few times in our course on reading.

The thing about curiosity, in the words of Nassim Taleb, is that it’s “Antifragile, like an addiction, and is magnified by attempts to satisfy it.” When you go down the curious path on a particular topic, you have to keep letting it pull you down. Don’t just stop because you feel like you should — if you want to keep going, keep going! Learn! Go deep! Trust us on this one: Ride the wave when it’s taking you. It may be a while before you get back up there.

When you decide to get off the path is really going to be an individual judgment, based on how curious you are, how competent you feel you are, and what you plan to do with that information. If you’re going to be a doctor, you have to go “all the way down the path” on the current and most up-to-date understanding of how the human body works, in great detail. Lives depend on it.

But if you’re a lawyer, you might be (rightfully) content to simply try to understand at a high-level how all the main bodily systems work and interact, without being able to do a detailed dissection of the heart. The doctor and the lawyer need not pursue their understanding of human anatomy in anywhere near the same level of detail, but they should both know the Big Ideas. Make sense?

So, long story short, what we’re reading at any given time is simply what currently grabs our curiosity; and there are innumerable ways to get it grabbed. Sometimes we will see a book on the shelf and pull it down, but more frequently it’s connected to something else we’ve read recently and decided to pursue further. Recently we recommended a biography of Will Rogers in Brain Food. Why that one, and why now? Because someone I respect recommended studying his life, and when the book came in, the time “felt right” almost right then and there. (Which is actually unusual — most of our books sit for a while before we read them.)

Did we know much about memory before starting the four-part series? No. But we had studied human personality and social psychology quite a bit, and memory is a logical extension of that. In this case, the book we discussed came straight from the bibliography of another one.

Once your anti-library is sufficiently stocked, finding the next book to read will always be the last of your worries. We always have many “on deck” and recommend you do too.

For the mailbag, this isn’t really a question maybe more of a post request, but I’d love to see a follow up or update on how your media consumption habits have evolved/changed. The post from Shane a few years back is a personal favorite, and something I’ve found myself revisiting often: 

I’m going to go in a slightly different direction than the question you asked, but hang with me.

We’ve been thinking a lot on this recently, with increasing concern that we’re filling our heads with junk. This, we believe, is not only a poor use of our time and causes more mistakes than are necessary but it also reduces our capacity to find the relevant variables in any given situation.

If you think of your mind as a library, three things should concern you.

  1. The information you store in there — its accuracy and relevance;
  2. Your ability to find/retrieve that information on demand; and
  3. Finally your ability to put that information to use when you need it – that is, you want to apply it.

There is no point having a repository of knowledge in your mind if you can’t find and apply its contents (see multiplicative systems).

Let’s talk about the first part today, which is the information you put into your mind.

We feel this is massively misunderstood, resulting in people failing to filter things from entering the “library of the mind.”

If your library is full of crap and falsehoods, you’re going to struggle and spend a lot of time correcting mistakes. You won’t be very productive and you’ll generally muddle through things.

Our minds are like any tool, and needs to be optimized in building this library. Clickbait media is not the stuff we want to put into our mind library. However, this crap is like cocaine — it causes our brains to light up and feel good. The more of it we consume, the more of it we want. It’s a vicious flywheel, like eating sugar.

Our brain isn’t stupid. It doesn’t want this crap, so while it’s giving you a mild dopamine rush, it’s also working very hard to make sure this junk doesn’t make it into your library. This is one reason that people re-read an article and don’t remember having read it. Their brains determined it was trash and subsequently got rid of it rather than storing it.  Sounds good right?

Well, sort of. As hard as our brains work to ensure this crap doesn’t make it into our library, if we keep feeding it junk, we will overwhelm that natural filter. Over days and weeks this isn’t a big problem, but over years and decades it becomes a huge one.

Junk in the library messes with accuracy, relevance, and gets in the way of effective and efficient use our of brains – it causes issues with retrieving and applying. (Which is most often done by our subconscious. Ever had a great idea in the shower, as you were falling asleep, or while driving? Exactly.)

And while we probably agree that the quality of what enters our head matters, it’s easier said than done.

Consider the CEO with 6 layers of management below him. Something that happens “on the ground floor” of the business, say an interaction between a salesperson and a customer, usually goes through six filters. There is almost no way that information is as accurate as it should be for a good decision after all that filtering.

Now, the CEO might recognize this, but then they have to do something psychologically hard, which is basically say to their direct reports, “I’m not sure I got the right information from you.” They have to go out of their way to seek out more detailed, relevant, independent information from the people close to the problem. (A good assistant will do this for you, but in a political organization they will also be hung out to dry by all parties, CEO included.)

So not only do we need to filter, but we need to be aware of what filters our information has already been through.

Let’s hit on one more related thought.

In our search for wisdom and high quality information to put into our library, we often turn to knowledge nuggets called sound-bytes. These deceptive fellows, also called surface knowledge, make us sound clever and feel good about ourselves. They are also easy to add to our “mind library.”

The problem is surface knowledge is blown away easily, like topsoil. However, we reason, most other people are operating on the same level of surface knowledge! So, in a twisted bout of game theory, we are rarely if ever called out on our bullshit.

The result is that this surface, illusory, knowledge is later retrieved and applied when we’re making decisions (again, often driven by the subconscious) in a variety of contexts, with terrible results. As the saying goes, “Garbage-in equals garbage-out.”

If you’re looking for a quick heuristic you can use for information you’re putting into your library, try the two-pronged approach of:

A. Time
B. Detail.

Time meaning – how relevant is this historically? How long will it be accurate — what will it look like in ten minutes, ten months, ten years? If it’s going to change that soon, you can probably filter it out right here.

One way to determine if the information will stand the test of time is by gauging its accuracy by examining the details. Details are so important that Elon Musk uses them to tell if people are lying during interviews. You want to learn from people with a deepaccurate fluency in their area of expertise: One of the ways you can assess that is through the details they provide. Surface skimming articles are sometimes meant to be readable by the lay public, but more frequently it indicates simply that the author only has surface knowledge! 

So be careful. We’d guess that 99.9% of click-bait articles fail both these filters. They’re neither detailed nor lasting in importance.

The good thing is that you can raise your standards over time. One major reason to read documents by people like Richard Feynman or Charlie Munger is that it gets you used to what really clear thought looks like. If you’re reading shallow, quickly irrelevant media all the time, when will you read Feynman?

For now let’s leave it at that – we’ll have more to say on this in the future. It’s important.

So many people always ask what’s the best book for word-for-word wisdom, or spend hours working out the most efficient means of doing something, which is all great, but in the spirit of a Munger-like avoiding of mistakes, I’d like to hear you and Shane answer what you’ve done in the sphere of learning about the world that’s been the biggest waste of time: the least bang for your mental-investment buck?

Interesting question. It’s hard to answer because everything seems to have some value or another – often it’s in the “what not to do” or “what doesn’t work” sphere, but that is still a useful sphere, so it’s not really a waste.

One thing that does come to mind is speed reading. That is a waste of time and totally counter-productive when you get down to it. If anything, we’ve tried to slow down our reading so we can savor and recall more of what we read. Speed reading is a snare and a delusion, and not worth the time.

Woody Allen had it right: “I took a course on speed reading…and was able to read War and Peace in 20 minutes. It’s about Russia.”

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If you’d like to submit a question for our next Q&A, please send it to us at [email protected] with the title “Ask Farnam Street.” We will choose a group of the most thoughtful questions and answer them right here on the site. Enjoy!