Edward Quince’s Wisdom Bites: The Art of Unlearning (Or, How to Escape the ZIRP Trap)

There is a dangerous comfort in experience. We assume that because we have navigated the river before, we know where the rocks are. But what if the river changes course? What if the water level drops?

We are currently navigating a potential regime change in markets—from a decade of zero interest rates (ZIRP) to a world where money actually costs something. The skills that made you rich in 2021 might be the exact habits that make you poor in the current cycle. Naval Ravikant provides the perfect framing for this struggle in today's Wisdom Bite.

The Wisdom Bite:

“The hard parts are not the learning, it is the unlearning. It’s not the climbing up the mountain. It’s the going back down to the bottom of the mountain and starting over. It’s the beginner’s mind... you have to be willing to start from scratch. You have to be willing to hit reset and go back to zero. Because you have to realize that what you already know, and what you’re already doing, is actually an impediment to your full potential.”

The Sunk Cost of Knowledge

In finance, we often talk about "sunk costs" regarding money. But there is also a sunk cost of intellectual capital. If you spent the last ten years becoming an expert in analyzing unprofitable tech growth stocks valued on "price-to-sales" (or price-to-dreams), you have a heavy sunk cost in that framework.

Unlearning is painful. It requires admitting that the "rules" you mastered were perhaps just temporary anomalies. It requires acknowledging that "history doesn't repeat itself, but it rhymes," and the rhyme scheme has changed. The strategies that worked when capital was free are often toxic when capital is scarce.

The Danger of the "Great Winfield"

In the 1970s, during the "Death of Equities," there was a character in the financial literature called the "Great Winfield" who said, "The strength of my kids is that they are too young to remember anything bad."

Sometimes, experience is a shackle. The veterans are often held back by historic norms. But today, the "kids" who only know crypto bubbles and Fed pivots might be the ones shackled by a lack of history. They need to unlearn the idea that the Fed will always save them. They need to unlearn the idea that valuation doesn't matter.

The Financial Takeaway

The market is a ruthless teacher. It punishes hubris. To survive, you must cultivate "intellectual humility." Ask yourself: What belief am I holding onto just because it worked for me in the past?

Are you still betting on "transitory" inflation? Are you still leveraging up because "rates never stay high"? Be willing to go back to the bottom of the mountain. Re-underwrite your thesis. True wisdom isn't just accumulating new facts; it's scraping away the barnacles of old, defunct beliefs that are dragging you down.