“The hallmark of a truly great investor is independence of thought.”
Phil Fisher

Thinking

Solitude in reading and thinking allows for deep, uninterrupted focus, fostering creativity, clarity, and self-discovery. It’s here, in the quiet, that you can truly listen to your own thoughts, solve complex problems, and understand your own beliefs and ideas without external influence.

In the book “Quiet: The Power of Introverts in a World That Can’t Stop Talking” by Susan Cain, there’s an example involving a test that illustrates how extroverted behavior can influence group dynamics.

Here’s the example:

The Harvard Business School Class Study

Setting: Students were placed into groups at Harvard Business School to solve a problem.

The ‘Plant’: An individual was strategically introduced into the group, equipped with an intentionally wrong solution, behaving assertively to sway the group’s decision. This person was placed there to observe the impact of their behavior on group dynamics.

Objective: The study aimed to examine the extent to which one person’s confident yet incorrect assertion could influence a group, especially within a competitive setting like Harvard Business School.

Outcome: The assertive individual with the incorrect answer frequently dominated discussions, leading the group to mistakenly adopt this solution. This demonstrated how extroverted behaviors might steer group decisions, potentially resulting in less optimal outcomes by overshadowing the input of quieter, possibly more insightful, contributors.

Implications: This example reveals the potential drawbacks of environments that excessively favor extroversion, where the loudest voice does not necessarily equate to the most accurate or best solution. It underscores the necessity for environments that allow introverts to contribute effectively without their thought processes being disrupted.

“Avoid mindless imitation of peers. I never talk to brokers or analysts. You have to think for yourself.”
Warren Buffett

Tying in the Importance of Reading and Thinking Alone

The study’s insights align with the broader value of reading and thinking in solitude. When individuals engage in solitary reading and contemplation, they are less likely to have their thought processes disrupted by external, possibly misleading, influences. This solitude allows for:

  • Deep Thought: Uninterrupted reading and thinking enable deep consideration of ideas, fostering original thought and problem-solving without the pressure of immediate group consensus.
  • Authenticity in Thought: Without the interference of a dominant personality, individuals can explore their own ideas thoroughly, leading to more authentic and potentially innovative solutions.
  • Clarity and Insight: In quiet reflection, one can assess information critically, free from the sway of group dynamics, which might lead to clearer, more nuanced understanding and insights.
  • Self-discovery and Confidence: Time spent alone with one’s thoughts helps in self-discovery, building confidence in one’s own ideas before they’re exposed to the critique or influence of others.

This case study at Harvard Business School thus serves as a microcosm for understanding why environments that allow for solitary thought and reading are crucial. They counteract the potential for intellectual conformity or error that can arise when assertive, yet incorrect, voices dominate, ensuring that the quieter, often more deliberate, insights have a chance to flourish.

“Thinking is the hardest work there is, which is probably the reason so few engage in it.”
Henry Ford

Charlie Munger: Two Types of Knowledge

Charlie Munger, the long-time business partner of Warren Buffett, has often used the story of Max Planck and his chauffeur to illustrate the concept of two types of knowledge: Planck knowledge and chauffeur knowledge.

During a commencement speech at the University of Southern California Gould School of Law in 2007, Munger shared the following anecdote: “I frequently tell the apocryphal story about how Max Planck, after he won the Nobel Prize, went around Germany giving the same standard lecture on the new quantum mechanics. Over time, his chauffeur memorized the lecture and said, ‘Would you mind, Professor Planck, because it’s so boring to stay in our routine, if I gave the lecture in Munich and you just sat in front wearing my chauffeur’s hat?’ Planck said, ‘Why not?’ And the chauffeur got up and gave this long lecture on quantum mechanics. After which, a physics professor stood up and asked a perfectly ghastly question. The speaker said, ‘Well I’m surprised that in an advanced city like Munich I get such an elementary question. I’m going to ask my chauffeur to reply.’”

Munger then uses this story to differentiate between:

  1. Planck Knowledge – This refers to deep, authentic understanding. People with Planck knowledge have “paid the dues” and possess the aptitude; they’ve truly mastered their subject or field. They understand not just the facts, but the underlying principles and complexities, making them capable of addressing sophisticated questions beyond rote memorization.
  2. Chauffeur Knowledge – This is superficial knowledge where individuals can recite information or give impressive presentations but lack the depth to handle intricate queries or unexpected situations. They’ve learned how to talk the talk but haven’t done the hard work to truly understand the subject. Munger suggests that many politicians, journalists, and even business leaders might fall into this category, where they can perform well in rehearsed settings but struggle when faced with deeper inquiries.

Munger emphasizes the importance of recognizing and valuing true expertise over mere performance. He warns against mistaking eloquence or presentation skills for genuine knowledge, urging people to seek those with real understanding when it comes to making decisions or seeking advice, especially in critical areas like investing or governance.

This story, while apocryphal, serves as a powerful metaphor for distinguishing between depth of knowledge and surface-level familiarity, a theme Munger often revisits in his talks and writings to highlight the importance of lifelong learning and intellectual honesty.

“All of humanity’s problems stem from man’s inability to sit quietly in a room alone.”
Blaise Pascal

Tying the Concepts Together:

Munger’s Planck/Chauffeur Test:

  • True Understanding vs. Surface Knowledge: Munger’s tale underscores the difference between genuine knowledge (Planck) and superficial, parroted information (Chauffeur). This distinction is crucial for personal and professional integrity, where one should strive to understand concepts deeply rather than just recite or mimic.

Susan Cain’s “Quiet” and the Harvard Business School (HBS) Study:

  • The Plant Experiment: In her book, Cain references an experiment at HBS where a student, acting as a “plant,” interjected with incorrect information during group discussions. This experiment showed how easily people can be swayed by dominant voices or incorrect information, even when they know better. It highlights how extroverted environments might pressure individuals into conformity or acceptance of false premises.
  1. Autonomy of Thought:
    • Both concepts emphasize the need for individuals to cultivate and protect their own thought processes from external noise or misinformation. Munger’s story warns against the allure of seeming knowledgeable without the substance, while Cain’s study points out the dangers of groupthink and the suppression of individual insight in favor of what seems popular or authoritative.
  2. Value of Introversion in Knowledge Acquisition:
    • Cain’s work champions introversion as a pathway to deep thinking and learning. Introverts often prefer to reflect and process information internally before contributing, which aligns with the deep, reflective learning style Munger advocates. This introspective approach can lead to ‘Planck knowledge’ rather than settling for ‘chauffeur knowledge’ by not allowing external chatter to dictate one’s understanding.
  3. Defending Against Misinformation:
    • Both narratives suggest a caution against letting others define your knowledge or skew your perceptions. In environments where one’s ideas or facts could be challenged by louder, possibly less informed voices, it’s vital to have the confidence and clarity to stick to one’s well-formed beliefs or to critically assess new information.
  4. Encouragement for Critical Thinking:
    • The lessons from both emphasize critical thinking. Munger encourages us to delve deep into subjects, while Cain highlights the need to sometimes withdraw from the collective to think independently. This is crucial in an age where misinformation can spread rapidly, and where having a strong, well-informed internal compass is invaluable.
  5. Educational and Professional Environments:
    • In educational settings or workplaces, understanding these concepts can lead to better practices that value depth over presentation, encourage quiet reflection, and foster an environment where each voice, especially the less dominant ones, is given space to contribute meaningfully.

By combining these ideas, one learns not only to seek and value true knowledge but also to protect the sanctity of one’s thought process against external pressures or misinformation, ultimately leading to more informed decisions, innovations, and personal growth.

“My idea of a group decision is to look in the mirror.”
Warren Buffett