Mr Know-It-All

Confucius said that real knowledge is knowing the extent of one’s ignorance. Aristotle and Socrates said the same thing. Is it a skill that can be taught or learned? It probably can, if you have enough of a stake riding on the outcome. Some people are extraordinarily good at knowing the limits of their knowledge, because they have to be. Think of somebody who’s been a professional tightrope walker for 20 years—and has survived. He couldn’t survive as a tightrope walker for 20 years unless he knows exactly what he knows and what he doesn’t know. He’s worked so hard at it, because he knows if he gets it wrong he won’t survive. The survivors know.

—CHARLIE MUNGER, JASON ZWEIG INTERVIEW, 2014

Griffin, Tren. Charlie Munger: The Complete Investor (Columbia Business School Publishing) (pp. 11-12). Columbia University Press. Kindle Edition.

Many people or professionals do go about representing that they are an expert in a certain field.

They may be right to be held out as such, for all their abilities, contributions and experience in a certain area.

The analogy runs, even in the case of a professional tightrope walker, there is an extent of one's expertise or circle of competence.

The tightrope walker, knowing what he knows, and what he doesn't know, will survive for this reason.

There is, indeed, a danger in not sorting out the unknown unknowns.

Are you blind to the extent of potential or actual risk and return, when managing wealth or businesses?

Knowing the extent of one's ignorance will allow an individual to then follow through to determine what needs to be clarified, absent which, an investor or businessman may wish to stay away from whatever is unknown.

Such may be how wealth is preserved, or grown.

For a copy of the complete investor, click here.