7/17/2019

Albert Einstein on Sifting the Essential from the Non-Essential

"The biggest mistake that most of us make is that we try to consume more information. We do this because we feel like we’re missing something. While we can all learn and improve our understanding of something, the constant search for what we don’t have and what we’re missing is also the natural response of someone who doesn’t truly understand what matters and what doesn’t. To understand what I mean consider investors.

The worst investors I know are focused on every news article, blog, or commentary on the company they own. Glued to their screen they look for some esoteric detail that others have missed. And because they are looking, they will eventually find something. Our brain convinces them that all of that effort paid off and they overvalue the new information. In fact, the vast majority of that time (9,999/10,000) that new bit of information won’t matter at all but they’ve lost the forest for the tree. Overvalued insight means unwarranted confidence. You can see where this is going."