In this blog, we've often referenced the DIKW (Data, Information, Knowledge, Wisdom) pyramid. While data is the base, and information provides meaning, and knowledge offers context, wisdom sits at the apex, representing the exercise of sound judgment and appropriate action. Unfortunately, as Simon Winchester warned, "today's all-too readily available stockpile of information will lead to a lowered need for the retention of knowledge, a lessening of thoughtfulness, and a consequent reduction in the appearance of wisdom in society".
The irony is that many seek answers from external sources, whether it's the daily barrage of economic updates or social media pundits. Yet, much of this is just "noise". As the esteemed Charlie Munger advised, "In my whole life, I have known no wise people who didn't read all the time — none, zero".
But it's not just about reading; it's about how you read. As an XTOD emphasizes, "Re-reading is probably more important than reading. Seek to cognitively own a great book rather than just reading it". It's about deep understanding, not just consumption.
The journey to wisdom involves:
• Continuous Learning: "The game of life is the game of everlasting learning". This means constantly seeking to "get a little smarter every day".
• Critical Thinking: Being able to discern "signal from the noise" and challenging assumptions, even your own. As an XTOD reminds us, "Compelling writing requires clear thinking".
• Humility: Recognizing that "Nobody knows anything, and that's okay". Steve Kerr gained more respect as a leader by admitting he didn't know everything and letting others make decisions.
• Prioritization: Understanding that "Clarity comes from subtraction, not addition". An XTOD simply asks, "Is this truly necessary?” when looking at a to-do list. "If it won’t matter in 5 YEARS don’t give it more than 5 MINUTES attention".
• Action based on Principles, not Predictions: As Edward Quince notes, "Actions demonstrate competence and create value, whereas words, often in arguments, lead to negative emotions and resentment".
The "hard part is knowing what to apply and when". This "true learning is 'on the job'". It's about applying timeless principles and developing your own "right filter" to navigate the complexities of life and markets. Because ultimately, "Being smart and being wise are not correlated". The goal is to cultivate the kind of wisdom that allows you to "focus on controlling the things you can", and approach life with a clear mind and sound judgment
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