Concept: Types of Knowledge
Known facts and future events with known probabilities
Unknown (no certainty with specific outcomes)
Things you don't know but could know
Unknowable (unresolvable unless time reveals it)
Insight: Information and Certainty
More information may generate a false sense of certainty
Principle: Investment Knowledge
We seek predictions from experts
Accepting what you don't know may lead to better outcomes than thinking you know the future
We tend to associate with groups who think like we do
Technique: Assessing Companies
Financial Strength Metrics: Debt-to-equity ratio, Current ratio, Quick ratio, EBIT margin, Return on equity (ROE)
Competitive Position Factors: Market share, Brand recognition, Product differentiation, Customer loyalty, Pricing power
Growth Prospects: Revenue growth, Earnings growth, Market growth, Competitive landscape
Concept: Investment Strategy
Raise cash
Add duration
Every decision should aim to beat 5% return
Mid-cap and European stocks are considered cheap
China investments carry geopolitical risks
Concept: TIPS (Treasury Inflation-Protected Securities)
Protects against inflation
Principal value adjusted based on CPI
Provides a real rate of return above inflation
Insight: Child Development
Children try more difficult things with parental support
Children learn to use tools before age 1, suggesting innate programming
Principle: Life Philosophy
Intentionally introduce randomness to your life
Concept: Future Prediction
The future is likened to a lottery with many possible outcomes
We can't predict the future, but we can understand the mix of possible outcomes
Investing when odds are favorable (at market lows) is preferable
Connections and Patterns:
There's a recurring theme of uncertainty and probability in both knowledge acquisition and investment strategies.
The notes emphasize the importance of understanding limitations in knowledge and prediction, both in general concepts and specific investment strategies.
There's a focus on holistic assessment in various domains: knowledge types, company evaluation, and investment decisions.
Broader Pattern:
The notes seem to be part of a larger exploration of decision-making under uncertainty, touching on epistemology, investment theory, and even child development.
Dissonance:
While the notes emphasize the importance of accepting uncertainty, they also provide specific metrics and strategies for investment decisions, which might create a tension between acknowledging unknowns and acting on known information.