Paradox

“A statement or proposition that seems self-contradictory or absurd but in reality expresses a possible truth” – Dictionary.com definition of paradox

I recently finished reading, “Getting Beyond Better” by Roger Martin and Sally Osberg.  It’s a good look at social entrepreneurship (what it is, examples of success, questions for moving forward, etc).  Although the book is short, I found several sections very thought provoking.  One such section was a discussion on three paradoxical characteristics that social entrepreneurs must have.

  1. Abhorrence & Appreciation – The social entrepreneur must hate the social challenge enough to be dedicated to changing it, but they must also spend enough time and effort understanding the challenge so that they appreciate it and the context within which it persists.
  2. Expertise & Apprenticeship – When they set about to permanently change the current system, the social entrepreneur must bring their own expertise to solve the problem (often from other areas of context), but must also be humble enough to continue learning from people within the system in an effort to find the best solution possible.
  3. Experimentation & Commitment – Like all of us, the social entrepreneur doesn’t have all the answers.  They need to try different potential solutions and remain committed to solving the problem.  Once a solution proves efficacious and scaleable, they need to be able to commit to expanding it’s usefulness and efficiency.

As a professional investor, the goal for me is to have all of these same characteristics.

  1. Passion NOT emotion – I would put the first one differently because investors largely deal with opportunities rather than problems.   However, the same tension exists.  Passion is a motivating force.  Passion keeps someone moving forward even though it’s difficult.  Passion is healthy.  Emotion is the enemy.  Emotion leads to bad decisions and lost money (or worse).  Being able to understand the different is crucial to successful investing.
  2. Expertise & Apprenticeship – When an activity can get rewarded like successful investing, it can be difficult to forget the process that led to that success because the rewards begin to multiply.  The really great investors are always learning.  They bring in as much knowledge as they possible can from as many different sources as possible.  After applying their expertise to the scenario, they go back and start learning again.  They repeat this process again and again and again.
  3. Experimentation & Commitment – For me, this is the hardest one.  When should I decide something isn’t working and get rid of an investment?  When should I hold on and have confidence in my analysis?  Occasionally, it seems like everyone else is making a fortune (say, in Bitcoin), but I just don’t understand how.  Should I join the party or stick with my boring investments?  Largely, the only real answer to these types of questions is that investing principles remain the same over time and investing tactics change.  Adherence to this answer is easier said than done.

In any event, “Getting Beyond Better” was an enjoyable and thought provoking book.

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