Quick update on the Singularity (before the actual post on creativity):
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It has since long been established that unenhanced humans, “originals”, can’t see beyond a certain point of technological progress (The Singularity). Enhanced humans, “metas”, however, can. It has recently come to my knowledge that there is a second singularity further down the road which evades even meta-human analysis.
In other news, dogs are doing just fine despite widespread joblessness in their species. As long as we humans are house trained, I’m sure robots will keep us as pets and treat us pretty well too.
Executive summary: This is another of my “sprezza shorts”, just a brief summary of a simple idea regarding creativity and procrastination.
In this case it’s about how (moderate) procrastination is good for creativity.
I think all the findings apply to analysts and investors as well: Try out a lot of ideas quickly, i.e. just start, but be a bit slow to finish your research and follow through with the actual investment. Dare to invest in the unconventional or unloved, but be quick to realize when you’re wrong.
Insights into creativity
In a TED talk from April 1, 2016 by Adam Grant, the following findings were presented:
Precrastinators (the opposite of procrastinators) are usually not very creative, probably due to the fact that they rush in and finish their projects right away, panicking today about deadlines four months hence :). They don’t give their brains enough time to think about the task.
Pathological procrastinators on the other hand never get anything done, so the question about their creativity is just moot.
It turns out the most creative people are moderate procrastinators. They put off finishing a project, a paper, writing a speech etc. just long enough to give the subconscious a chance to think thoroughly about the task.
So, don’t chastise yourself for starting projects and putting them off until the last moment. That’s a hallmark of creative people.
When researching stocks to invest in, I think going slow and being patient is the most important skill you can have. Go ahead and start researching as many stocks as you like; then hold back a little before finalizing your models and your thinking, not least the actual investment.
Challenge defaults: Think and walk at least a little outside the box; challenge rules, where do they come from, who do they serve? Adam Grant says that if you’re still using Internet Explorer or Safari as your web browser you might be a lost cause…
All value investors are good at this. They dare to question “truths” about broken companies and business models, and buy when there’s blood in the streets.
Do many things, be wrong, try again; its not you, its the project, the process, the attempt, “everybody fails at first”. The most creative people simply try many more things and thus widen their range of “production”. A few projects in the right tail then turn out to be unusual hits.
Grant exemplifies with Bach, Beethoven and Mozart, who were extremely prolific composers with a few works of genius.
Finally, Grant talks about “improvers” or second/last movers, as opposed to first movers. I don’t know what kind of data he is referring to, but I do buy his argument that it’s easier to take a given idea and improve it than to create it from scratch. Think about Facebook and Google for example, which were both very late to the game. Or Tesla.
This principle is perhaps a bit harder to apply to investing, but do try anyway. Look at what people are buying and then make your own research. There was plenty of time to research Fingerprint Cards, e.g., after it became the talk of the town.
Why not just borrow other people’s research methods and improve on those? Take the quattro portfolio strategy and improve the composition, weighting and timing rules. Use Hussman’s ideas about valuation and market internals but use other variables and time periods, and so on.
Summary: Blame it on the rain
In life, work and investments (and other areas) be quick to start but slow to finish, in order to let your subconscious take a long hard look a the problem, before you do anything rash.
Use and improve on other people’s methods.
The most creative people simply try more things than other people (and fail at and quit more things). Blame it on the rain, not your person or worth. Dare to be wrong often.
Assume others are wrong; challenge defaults. Obeying (all) rules won’t get you anywhere. You don’t wait for a green light (as a pedestrian) if the street is empty, do you?
You’re not using Internet Explorer, are you? Right, so why obey other stupid rules?*
*except for the fact that orders have been shown to shut down certain brain areas, and thus stop you from questioning the motive, morality, authority and logic of the order.
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Other articles by me about robots, AI, job destruction, programming etc.: