{"id":4008,"date":"2011-04-11T10:07:57","date_gmt":"2011-04-11T16:07:57","guid":{"rendered":"http:\/\/www.jasonapollovoss.local\/?p=4008"},"modified":"2018-09-21T02:07:42","modified_gmt":"2018-09-21T06:07:42","slug":"investing-lessons-from-da-vinci-and-edison","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2011\/04\/11\/investing-lessons-from-da-vinci-and-edison\/","title":{"rendered":"Investing Lessons From Da Vinci and Edison"},"content":{"rendered":"<p><span style=\"font-size: 16px;\">As I discuss in my book <em><a href=\"https:\/\/jasonapollovoss.com\/webbook\/\" target=\"_blank\" rel=\"noopener\">The Intuitive Investor: A Radical Guide for Manifesting Wealth<\/a> <\/em>in my almost two decades as a successful investor I have discovered that the most important investing skill is: understanding information.\u00a0 This is because information is the basis for investment evaluation and investment decisions.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Understanding information well equips investors to recognize when they don\u2019t have enough information; to rapidly sift through unimportant information; to see what other investors miss; to more artfully respond to crisis or panic as it affects investments; to properly evaluate the management team of a business to know when it is time to either buy or sell an investment; to uncover hidden risks; and to avoid herd mentality.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">In keeping with this important theme I interviewed Michael J. Gelb, author of the New York Times Business best seller<em> How to Think Like Leonardo da Vinci: Seven Steps to Genius Every Day<\/em> (Bantam Doubleday Dell, 1998) who specializes in applying lessons from geniuses like Da Vinci to improve our thinking.\u00a0 Hopefully this leads to a greater understanding of information so that we can accomplish great things as investors.\u00a0 Mr. Gelb is also renowned for his seminars and consulting for a number of global investment firms based on his research.\u00a0 This is part one of a two part interview &#8211; look for part two tomorrow.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Jason Apollo Voss (JAV): Which of Da Vinci\u2019s principles do you feel are important for investors to know about to improve their understanding of information? \u00a0How may someone apply these principles to make better investment decisions?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Michael J. Gelb (MJG): All of the principles are important.\u00a0 Each one sets the stage for the one that follows and together they form a system for thinking like Leonardo.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">The Da Vinci principles are:<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 16px;\"><strong>Curiosit\u00e0<\/strong> \u2013 An insatiable quest for knowledge and continuous improvement.\u00a0 The best investors I\u2019ve met are unrelenting in their questioning about a company\u2019s balance sheet, valuation, management, culture and competitive position, among many other things.<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-size: 16px;\">JAV:\u00a0 I would definitely agree that the best investors I have known have been insatiably curious.\u00a0 In fact, I have said to many investor groups and brokers whom I\u2019ve spoken to over the years that to be good at investing you have to be a Renaissance man; knowledgeable about many things, and especially about how things interconnect.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">MJG: In the mid 90s, I co-directed a series of 3-week residential Leadership Development programs for the senior leaders of a global investment firm ( LGT).\u00a0 The aim of the program was to guide them to become \u201cUomo Universale\u201d aka Renaissance Men and Women. The program included lessons in poetry with the former Poet Laureate of Great Britain, Ted Hughes and chess\/strategy lessons from Grand Master Raymond Keene, along with guidance in How to Think Like Leonardo from Yours Truly.\u00a0 I guess it worked because the firm was sold shortly after our programs were completed for a substantial profit.<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 16px;\"><strong>Dimostrazione<\/strong> \u2013 Learning from experience\/Independent thinking.\u00a0 Why do we have bubbles followed by crashes, followed by bubbles and crashes?\u00a0 One reason is that too many investors follow the herd rather than thinking independently.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 16px;\">JAV: It seems that human beings are wired in our DNA to be social creatures and to align ourselves to the movements of the group, what are some simple steps we can we can take to become more independent thinkers?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">MJG: Leonardo counseled that we discipline ourselves to consider multiple perspectives, especially those that are in disagreement with our opinions.\u00a0 As he noted: \u201cThe greatest delusion men suffer is from their own opinions.\u201d<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 16px;\"><strong>Sensazione<\/strong> \u2013 Sharpening the senses.\u00a0 Investors need to pay attention!\u00a0 It\u2019s critically important to listen carefully and see what\u2019s actually going on around you.\u00a0 Investors need to be sharp (a sensory term-the opposite is \u2018dull\u201d).<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 16px;\">JAV: Would you include instinct and intuition in this category?\u00a0 How did Da Vinci feel about using his instincts and intuition to make better decisions?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">MJG: Leonardo believed that sensory awareness and refinement served to nurture intuition.\u00a0 As he stated it: \u201cThe five senses are the ministers of the soul.\u201d<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 16px;\"><strong>Sfumato<\/strong> \u2013 Managing ambiguity and change.\u00a0 The ability to maintain composure in the face of uncertainty may be the most important quality for a successful investor. When greed dominates prices are high, when fear dominates things go on sale, but to discern what\u2019s really going on investors must stay centered and free from greed and fear.\u00a0 Easy to say, hard to do!<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 16px;\">JAV: I totally agree.\u00a0 To be a successful investor, you have to gain comfort with uncertainty and change.<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 16px;\"><strong>Arte\/Scienza<\/strong> \u2013 Whole-brain thinking.\u00a0 Too many investors use only half their brains.\u00a0 Left-brain investors crunch the numbers and do it all by charts and graphs, Right-brain investors go by feeling but aren\u2019t rigorous quantitatively.\u00a0 Whole-brain investors analyze data comprehensively and <em>then<\/em> consult their intuition.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 16px;\">JAV:\u00a0 Well said.\u00a0 In our culture it seems that there is an over-emphasis on analytical thinking, so what are some things that people can do to increase their whole-brain thinking?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">MJG: One of the best things people can do is practice Mind-Mapping, the whole-brain idea generation and organization method developed by my good friend Tony Buzan.\u00a0 Mind Mapping engages the left hemisphere through the discipline of selecting relevant key words and the right hemisphere through the use of color, imagery and pattern generation.\u00a0 If you ask Buzan about his inspiration for creating Mind maps he will tell you that he was particularly inspired by studying the notebooks of Leonardo Da Vinci.<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 16px;\"><strong>Corporalit\u00e0<\/strong> \u2013 Body-mind fitness.\u00a0 Psycho-physical fitness allows investors to manage the stress associated with risk.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 16px;\">JAV: When I was a portfolio manager I found that I <em>had<\/em> to exercise in order to do my best thinking.\u00a0 For one, it was a source of stress-relief, but also often resulted in some of my best ideas as my left brain would relax and allow my right brain some space to do its work.\u00a0 Is that another way to think of corporalit\u00e0?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">MJG:\u00a0 Yes, many people report that they get their best ideas during or just after exercise.\u00a0 And, although the brain is just over 2% of the average persons body weight it utilizes more than 25% of our oxygen intake.\u00a0 Exercise helps to keep your brain oxygenated and the result is clearer thinking.<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 16px;\"><strong>Connessione<\/strong> \u2013 Systems thinking.\u00a0 A great genius like Leonardo makes connections that other people don\u2019t see.\u00a0 Leonardo invented the parachute before anyone could fly-That\u2019s thinking ahead!\u00a0 This type of thinking is especially important in the investment world.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 16px;\">JAV: How is this different from the whole brain thinking we were talking about before?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">MJG: Connessione is the <strong>product <\/strong>of all the principles for thinking like the Maestro.\u00a0 If you are unrelentingly curious, cultivate independent, rigorous thinking, sharpen your senses, embrace uncertainty, use your whole brain and keep it oxygenated then you are much more likely to discover new connections.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">JAV: In your more than three decades of teaching some of the world\u2019s largest corporations about applying principles to increase genius, what obstacles to empowered thinking do most people face? \u00a0How can individual investors overcome these?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">MJG: Many people have been conditioned to do the opposite of the Da Vinci principles.\u00a0 Instead of being encouraged to ask challenging questions they just try to get the answer that they think the teacher, professor or boss wants.\u00a0 A recent headline in The Onion proclaimed \u201cLOWEST COMMON DENOMINATOR PLUMMETS.\u201d\u00a0 It\u2019s funny, but I\u2019m afraid it\u2019s true.\u00a0 Education has been geared toward test results rather than independent thinking for the past few decades and the result is that Dimostrazione (independent thinking) is rare.\u00a0 And, many people work in environments that dull down the senses.\u00a0 If you are confined to work in a cubicle then it\u2019s harder to think out of the box.\u00a0 In the last 30 years the pernicious trend toward short-term thinking has atrophied the ability of many to embrace the uncertainty that inevitably accompanies innovative breakthroughs.\u00a0 Despite lip service to the notion of whole-brain thinking and work-life balance, many folks work in situations that are dominated by half-witted approaches and a disregard for wellness.\u00a0 And, big-picture, systems thinking, remains elusive.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">JAV: Well said.\u00a0 In my investment career one of my most important screens for an investment was the way in which management thought about time.\u00a0 That is, where was their mental focus and energy?\u00a0 Was it on long-term wealth creation, or on satisfying the Wall Street consensus for the next quarter\u2019s earnings report?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">So Michael, if executives have a hard time with this how can folks overcome these obstacles?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">MJG: All of my books are devoted to helping people find practical tools that will allow them to embody the principles of genius thinking.\u00a0 Keeping a notebook like Leonardo did and learning to Mind Map, are, for example, powerful means to overcome these obstacles.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">JAV: Leonardo was always learning new things. How can investors learn to learn?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">MJG: One of the myths about great geniuses is that they don\u2019t make mistakes, but, of course, this is nonsense.\u00a0 Leonardo made some doozies-like his faulty attempt to divert the flow of the Arno River for the Florentine government (he caused a flood!) and his experiment to dry the paint for his masterpiece entitled the Battle of Anghiari (he melted it!) but Leonardo always reflects on the lessons learned and used the knowledge to avoid making the same mistake again.\u00a0 And, he was continuously exploring to learn more about everything.\u00a0 So the simple answer is that investors must use mistakes as learning opportunities and continue looking for new opportunities and connections.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">JAV:\u00a0 You\u2019ve also written about Thomas Edison (<em>Innovate Like Edison<\/em>, Penguin 2007). Why Edison?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">MJG: Leonardo was probably the most creative person who ever lived but Thomas Edison is history\u2019s greatest practical innovator. Beyond his invention of the phonograph, motion pictures and a system to light the world, Thomas Edison invented the rigorous, disciplined process of innovation. He established the world\u2019s first Industrial Research and Development laboratory.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Although Leonardo\u2019s principles are profoundly relevant for the development of human potential and organizational creativity the Maestro was concerned with pure truth, beauty and goodness, whereas Edison was more focused on applying creativity to generate wealth.\u00a0 Edison noted, \u201c Anything that won\u2019t sell I don\u2019t want to invent.\u00a0 Sales are proof of utility and utility is success.\u201d<\/span><\/p>\n<p><span style=\"font-size: 16px;\">I hope that you enjoyed this.\u00a0 Look for part two about Thomas A. Edison tomorrow.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>As I discuss in my book The Intuitive Investor: A Radical Guide for Manifesting Wealth in my almost two decades as a successful investor I have discovered that the most important investing skill is: understanding information.\u00a0 This is because information is the basis for investment evaluation and investment decisions. Understanding information well equips investors to [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-4008","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/4008","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=4008"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/4008\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=4008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=4008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=4008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}