BC TRADING
Saved by @CodyyyGardner

Circle of Competence 101:

@SahilBloom x @jackbutcher

↓

 1/

A Circle of Competence is the set of topic areas that align with a person's expertise.

If the entire world of information were to be expressed in a circle, an individual's Circle of Competence is the small sub-circle that represents their expertise.
2/

The idea surfaced in the 1996 BH annual letter.

"You don’t have to be an expert on every company...you only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital."
3/

A Circle of Competence is built over time.

It is built through experience, reading, dedicated study, and effort.

It is dynamic, not static.

It can expand as you deepen your knowledge in new areas. It can contract if you fail to nurture your existing areas of expertise.
4/

To engage this mental model in your life, there are two key processes to go through:

(1) Identify what falls within your circle
(2) Identify the boundaries of your circle

(1) is all about figuring out what you know, while (2) is about humbly admitting what you don’t.
5/

Let’s look at a few examples of where we see the Circle of Competence in action and how it can help you win.

In investing?

Berkshire Hathaway provides the classic example of investing success from sticking within the boundaries of your Circle of Competence.
6/

Warren Buffett and Charlie Munger have consistently passed on investment opportunities that fell outside of their respective Circles of Competence.

At times, it led to what might look like big misses, including failing to see the potential and invest in Google and Amazon.
7/

But while you hear about these misses (“the anti-portfolio”), you don’t read about all of the bad decisions it saved them from making.

As Munger once said, you can become a consistent winner by “trying to be consistently not stupid, instead of trying to be very intelligent."
8/

In business?

The best operators know their core competencies and are honest about their incompetencies.

The visionary CEOs hire field general, execution-focused COOs.

The field general CEOs hire visionary product leaders.

Own your competencies, outsource the rest.
9/

So how can you implement the Circle of Competence model into your life?

First, identify your circle and its boundaries.

What topics do you know more about than most people?

What topics do others look to you on?

What are you constantly excited by and learning more about?
10/

Next, be ruthlessly honest with yourself about that circle and its boundaries.

Build checks into your decision process that pressure test whether you are remaining true to your Circle of Competence.

Consistently sticking to your circle will lead to good long-term outcomes.
11/

Finally, keep expanding and deepening your Circle of Competence.

Embrace intellectual curiosity!

Is there a new topic you are excited about? Read everything you can get your hands on.

We live in an unprecedented era of access to information.
12/ You no longer need to pay a big tuition bill to learn something new.

You can seek out thought leaders, ask them questions, read their articles, listen to them speak.

It is truly remarkable. Take advantage!

You may just find that your Circle of Competence begins to grow.
Words by @SahilBloom
Visuals by @visualizevalue

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Words: @BrianNorgard

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1. Too complex


2. Can't be easily described
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10 ideas that changed my life: (thread)

Illustrations by @visualizevalue.

1/ Get more done by doing less.


2/ You can't get better unless you get started.


3/ Zoom out. It's getting better. (IP via @behaviorgap)


4/ 'Normal is an illusion. What is normal for the spider is chaos for the fly.' — Charles Addams
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Building Principles:

↓

1/

Value = doing things that other people don't do, won't do or can't do.

"You get paid in direct proportion to the difficulty of problems you solve" — Elon Musk


2/

Service is high-touch result generation (building experience), product is low-touch result generation (scaling experience).


3/

In a world of infinite distraction, focus is the only path to freedom.


4/

Sell time to buy experience, sell experience to buy time.

“If you don't find a way to make money while you sleep, you will work until you die.” — Warren Buffett
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Why you need to be selfish: (thread)

I have had countless conversations with people looking for a way to build a brand/audience/community online.

Here's the one thing I think everyone asking that question should be thinking about.

You need to be selfish.

Why?

Because (at a high level) if it helps you, it will eventually help others.

At a tactical level, it's provides the motivation to keep going.

The lack of instant feedback on what we share publically is enough to extinguish most projects before they even get moving.

But allow me to reframe the idea:

You need to do things that benefit you even if no one sees them.

Did posting @visualizevalue images into a void 18 months ago do anything for my career as a designer?

Yes.

Would I have kept going if there wasn't some selfish drive to be more competent? (and make more money, work with better clients, etc)

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Building a Personal Monopoly: (thread)

How to combine competence, curiosity, and character to create a category of one.

↓


1/ Competence

If we want anyone to spend their time, attention or money on anything of ours, we must first be competent.

Lots of people are competent, so there's lots of competition here.

Let's say this is "school teachers"


2/ Competence + Curiosity

If we add curiosity to the mix, competition starts to thin.

This separates the generalist practitioners from the irrationally passionate.

Let's say this is "school teachers who are curious about learning innovation"


3/ Competence + Curiosity + Character

Now combinatorics put us in category of one territory.

Let's say this is "school teachers who are curious about learning innovation, building a gamified school inspired by SpaceX's Ad Astra." (real example: @anafabrega11)


4/ Making it Tangible

All this is great until it comes to communicating it to the rest of the world.

Which is why bad packaging kills amazing ideas.

Writing, design, marketing — our job here is to lose as little as possible in translation from the intangible to the tangible.
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Why Monthly Option buying ?
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A 🧵

(1/n)

Orderflow charts essentially show the real time buying and selling happening in the markets.

In below chart, you can see how market sell orders are shown to the bid side and market buy orders are shown to the ask side.

(2/n)


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