Wednesday, January 26, 2011

Interview with Farnam Street

Curiosity is a big fan of the Farnam Street blog, an eclectic collection of "psychology, behavioral economics, human misjudgment, persuasion, and other subjects of interest." Often, Farnam Street answers the questions we never even thought to ask.

We recently had the incredible opportunity to interview Farnam Street. Enjoy this brief Q&A and head directly over to Farnam Street for the more important questions that blog is answering!

What was the impetus behind the Farnam Street blog?

I ended up with an undergrad and a master's degree being largely ignorant to how the world works. I think the education system failed me. I did a two-year MBA and actually felt stupider at the end. Professors wanted rote regurgitation of textbooks without any critical thought or reasoning. I wanted to reduce my ignorance and the Farnam Street blog is a way to catalog that journey.

How do you manage the content that you keep up with?

The amount of information these day is truly astonishing. Primarily I use Google Reader, newspapers, and magazines. Another way I come across interesting reading is through people emailing me. We have some incredibly bright people reading Farnam Street and they pass along some interesting articles I likely never would have come across. It's not a perfect system but it works okay for my needs.

What are a few of the words that jump out at you as something you must read about?

The more I read, the more skeptical I've become. I'm sure subconsciously there are words that make me more likely to read things, but I'm not aware of them. Interestingly, since I use Google Reader for a lot of reading, Google would likely have the capability to pull this information together.

I find myself drawn to certain people and thinkers more than words– I read everything Charlie Munger and Atul Gawande write. Michael Lewis and Malcolm Gladwell are two of the best storytellers of our generation. Paul Krugman is a great essayist. I love reading Garrett Hardin and Herbert Simon, two great multi-disciplinary thinkers.

A lot of people read a headline and dismiss it because it challenges something they know. I try to make a point to learn the other side of an argument. I get a lot of insight from reading things that contradict, rather than reinforce, what I think. Sometimes I realize I'm wrong and sometimes I walk away with a better understanding of the other side of the argument. It's very, very, hard to change your mind on something.

What is the most untapped source of interesting information that you are aware of?

Books. Go back and read Herb Simon's Models of My Life and Hardin's Filters Against Folly. There is so much wisdom sitting there waiting to be discovered for those who are curious. I think I read somewhere that the number of books in a house is correlated to better academic performance for children. Of course, as a society, we'd rather be entertained by the mind-numbing shows we find on TV than struggle through Dickens. If you're a believer that all behavior is learned, then it's not a stretch to say we're encouraging our children to be lazy. People discount Amy Chua's new book about her parenting style, but I've read it and it contains a lot of wisdom. American kids are generally lazy.

Is there anything you haven’t been able to learn about on the internet?

Tons! You can learn a lot on the internet but you can't easily apply what you learn to systems involving humans. I can learn chess online and play in real life pretty well, but there are limits. If you take something more complicated, like project management, you can learn all the material online but you're still going to have problems trying to apply that information to real life because there are innumerable human complexities involved.

You can take a virtual tour of the Sistine chapel online but you will never know what it smells like. Another example: in investing you can read about being patient and not selling when a stock you own goes down by 50% in a week. Most advice will be to sit and be patient. But if you've never had that happen, it's hard to realize the myriad of factors that flow through your mind. Reading about panic and experiencing it are two very different things. It's hard to teach someone over a medium like the internet what that feels like. It's hard to explain why a fresh croissant tastes different in Paris than anywhere else. Yet, if you've been to Paris, you know.

How has being curious helped you in your job/life?

As an investor, I spend my life reading, learning, and trying to find mis-priced opportunities. Learning requires time and interest. I see curiosity as the engine that drives learning. Without curiosity you won't get very far because you'll quickly lose interest in anything difficult to grasp. If you're not curious you're going to skip the hard work.

I've always curious as to why people, including myself, create so much folly. By observing human behavior, connecting ideas from multiple disciplines, and trying to think critically I hope to reduce my statistical share of errors and, in turn, improve my odds of success.



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