It’s almost impossible to learn anything new if you think you already know everything:
Nan-in, a Japanese master during the Meiji era (1868-1912), received a university professor who came to inquire about Zen.
Nan-in served tea. He poured his visitor’s cup full, and then kept on pouring. The professor watched the overflow until he no longer could restrain himself. “It is overfull. No more will go in!”
“Like this cup,” Nan-in said, “you are full of your own opinions and speculations. How can I show you Zen unless you first empty your cup?”
Rejecting the Unfamiliar
J.D. Roth of Get Rich Slowly recently wrote a fantastic post about Fail-Safe Investing, a Personal MBA-recommended personal finance book. The investing methodology Fail-Safe Investing recommends is deceptively simple: there aren’t many moving parts, and 3/4 of the recommended portfolio is deeply counterintuitive. (The recommended portfolio is 25% total stock market index, 25% long-term treasury bonds, 25% cash/money-market, and 25% physical gold bullion.)
It’s not immediately obvious why Browne’s “Permanent Portfolio” is constructed in this way: you have to be willing to study it in more detail to understand why. (Here’s the short version: each of these assets fluctuates independently of each other in response to changing and unpredictable market conditions. At any point in time, at least one (potentially two or even three) of these assets will have decreased in value, but the others will have increased at least enough to compensate, if not allow the portfolio as a whole to increase in value.)
What’s even more interesting than JD’s post is the comments section. Almost immediately, readers started exclaiming that there is no way they’d ever consider holding that much gold, or that someone would have to be crazy to purchase long-term treasury bonds when they’re so obviously overpriced right now. Most of the commentators offered “improvements” to the portfolio without understanding the choices behind it, even though it was the first time they’d heard of the new strategy. Instead of learning more, they assumed what they already knew was better. Conspicuously absent was any comment like “I don’t fully understand these recommendations – can anyone explain or point me to more information?”
Seek First to Understand
J.D.‘s reader’s aren’t unique – I regularly get comments and e-mails from first-time readers who believe that there’s simply no way a person can learn how to become a successful businessperson without getting an MBA.
In Stephen Covey’s 7 Habits of Highly Effective People (a previous Personal MBA recommendation), the fifth habit is “seek first to understand, then be understood.” This has always been my favorite of Covey’s seven habits because it’s a nice summary of the teacup parable – if your first impulse when faced with new information is to reject or “improve” upon it without first taking the time to understand it, learning something new will always be harder than it has to be.
Keep your head empty enough to continually fill it with something new, and you’ll go far in this world.