A few years back, I flew down to San Francisco for a interview with Facebook. The interview was in their hardware group. While most people think of Facebook as primarily a software company, they also design and build the server hardware that’s placed into their data centers.
Fascinating facts you probably never cared about.
Anyway, there I am being interviewed by a young, white, male engineer in his mid-20’s… dressed in overpriced hipster-clothing. He was tapping away on his computer taking notes, checking his phone once in awhile, and grilling me with various questions.
I was doing my best to answer them.
At one point during the interview he asked a question that stood out — He said, “How do you keep up to date in this industry? What websites or publications do you read to stay informed?”
This question stood out not only because it emphasized the importance of keeping up to date in a field of work, but also the importance of being “plugged-in” and connected to the “correct” influences when you work for a corporation.
Contrarianism & Investing
If you’re reading this, the odds of you being an investor is quite high. If that’s the case, you likely already know the dangers of “following the crowd” when it comes to investing. Certainly sometimes the crowd gets it right, but the crowd can also get it very very wrong.
History is filled with tragic stories of investors that got crushed following the crowd.
In my mind, independent thought when investing is far more valuable than trying to keep a finger constantly on the pulse of the investing world.
But how do you know if you’re truly a contrarian thinker?
Funny enough, one of the great ironies of the investing world is Warren Buffett — He’s arguably one of the best contrarian investors in the world, and one of the best independent thinkers. The man actually moved away from Wall Street to Omaha Nebraska so he could think independently.
The irony, is that nearly forty thousand “contrarian” investors flock to Omaha to hear him speak every year at the Berkshire Hathaway annual meeting. Are all forty thousand really contrarian thinkers?
All the while Buffett extols the virtues of index investing — essentially telling his crowd to invest with the rest of the crowd (albeit at a very low cost).
Buffett certainly didn’t build his wealth by following the crowd. He did it by being a contrarian and buying unpopular stocks.
It should come as no surprise then, that I believe good investors should put some effort into unplugging from popular culture.
Cognitive independence gets relatively little attention compared to more popular topics like financial independence, but one thing I’ve learned over the years is that many financial independent-types are also really independent thinkers.
So which came first, the chicken or the egg? The money or the independent thought?
It’s hard to say, but I will say this — in my experience it’s far easier to practice cognitive independence when you don’t have to work 50 hours a week.
Let me give an example: Every morning around 8:30am I set out on my morning walk with nothing but a set of keys. (Yes, I wear clothes too!)
I leave my cellphone at home and I don’t bring a radio, or any other music device. It’s just me and the fresh air. I’m completely alone with my thoughts and unplugged from the world, with only two purposes in mind: To walk and to think.
I do it this way on purpose. It’s my time to think independently about the world without outside influence getting in the way. I’m almost certain that without financial independence, these daily walks wouldn’t happen.
If I was working, I’d be commuting to work on a bus with the rest of the crowd — face-down in their phones and all consuming the same media.
At work I would be expected to “keep up” with all email, latest corporate management trends, industry, and technology changes… just every other employee.
As a financially independent investor, I’m mostly isolated from that required “group think”.
Now, I purposely try to spend a lot more time “unplugged” from the consumer world. I don’t even bother buying a data plan for my phone — there’s no need (I don’t need to check my phone every five minutes). I can’t even remember the last time I read a facebook timeline.
I’m just not part of that consumer world anymore and I think it’s made me a better person and a better investor. Financial independence was the key that allowed me to unplug from it all.
At least I don’t have co-workers asking me if I’ve seen the latest TV show or laughed at the latest cat video on Youtube anymore. What a relief!
That’s not to say this idea is without its detractors — Some people might view being unplugged from popular culture as a bad thing. Like I somehow might “lose touch” with reality or something.
I get that, but there’s really nothing to fear from unplugging a little. Popular culture will find you if you even halfway pay attention.
For example — I’ll be chatting with my neighbor and he’ll say to me something like,
“Hey did you see that new Incredibles movie this weekend? It was great!”
I’ll answer, “Uh, no I didn’t. What’s that movie about anyway? Why was it good?”
And just like that, my neighbor will tell me everything I need to know about Incredibles 2 and why it’s a great movie. My neighbor feels important and knowledgeable, and he’s more than willing to tell me all about this new movie.
But what about young people (teenagers) that don’t usually offer-up conversation to adults like myself? Well, that’s just a simple matter of asking them about stuff they’re interested in.
“Hey, you seem like you’re pretty good at that video game. What’s it called?”
“This? This is Fortnight for the Nintendo Swtich. It’s the new hotness right now.”
“Looks pretty cool. How is it better than the old fps game like I used to play?”
At that point, any teen would be willing to offer up information that makes him superior to his elders.
The secret is really to just not have an ego about it. “Popular” culture will simply find you if you’re willing to ask questions and maintain a curious mind.
The information we consume has a HUGE impact on how investors form our worldviews. Simply put, we can let popular culture either define us, or serve us.
It’s your choice.
My suggestion with this post is that investors try unplugging a little. Turn off the social media for awhile. Close the laptop.
Instead, seek out new and original ideas, and spend the time to cultivate them in ourselves. By doing so, we stand a very good chance of having excelling outcomes in our investments and life.
If we truly want to be better investors and better people, cultivating independent thought and a contrarian viewpoint might just be the key to a different outcome.