I am reading The Art of the Good Life by Rolf Dobelli. There is a chapter titled The Circle of Competence which is particularly good. This article is based on that chapter.
Here are some relevant quotes taken from that chapter:
Warren Buffett: Know your circle of competence and stick within it. The size of the circle is not important; knowing its boundaries however is vital.
Charlie Munger: Each of you will have to figure out where your talent lies. And you will have to use your advantages. But if you try to succeed in what you are worst at you will have a very lousy career. I can almost guarantee it.
Tom Watson (the founder of IBM): I’m no genius. I am smart in spots – but I stay around those spots.
Now I wish I had had this advice twenty years ago. I would not have wasted money on marketing courses. I am passionate about Philosophy and reading generally speaking. Marketing was never my cup of tea and I have wasted both time and money on it.
But now I have this advice and better late than never. I’ll stick to writing books on subjects I know something about and get myself a partner who can handle the marketing of those books. I need someone trustworthy and competent. If you know of someone please let me know.
Some more points made in the chapter:
- Use your circle of competence in deciding what work you want to do. If you get a tempting offer for a job not within your circle, turn it down. Dobelli refused an offer of a million euros to write a biography of a person because writing biographies was not within his circle of competence. He didn’t have the skill set to research and write biographies.
- Avoid the temptation to broaden your circle of competence. Chess players do not make good business strategists for example. Skills are domain specific.
- So how do you create a circle of competence. First point is that it takes a long time. Years and decades even. You cannot get yourself a circle of competence by surfing Wikipedia. Second point is that it takes passion. Actually the word Dobelli used was obsession. You need to spend thousands upon thousands of hours mastering your skill and that will take years as was said earlier. Bill Gates was obsessive about Programming; Steve Jobs about calligraphy and design; Warren Buffett about stock investments and so on.
So if you are young define what you are passionate about and make that your career. Be prepared for the long haul. If you are old stick to the skill set that you possess and outsource what you are not good at to competent professionals.
I’ll end with another quote from the book: “A professional backgammon player called J.P would make a few deliberate mistakes to see how well his opponent would exploit them. If the other guy played well, J.P. would stop playing. That way, he wouldn’t throw good money after bad. In other words, J.P. knew something that most gamblers don’t: he knew when not to bet.”
The above quote is taken from the book Risk Intelligence by Dylan Evans.
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