Two Investing Theories from Philosophy Masters?
Scottish philosopher David Hume believed that the human mind is a blank slate (“tabula rasa”), which is shaped by experience and perception is imprinted in our consciousness as we age.
Hume believed that as human beings develop because of their interactions with the world, they should try to understand how they do so.
John Locke similarly argued that there were no such thing as innate ideas. He asked the crucial question: “How is the mind furnished?”
The purpose of his works was to seek out the origin of reason and knowledge. His answer was one word: “experience.”
Both Hume and Locke belonged to the school of thought known as Empiricism.
Empiricists believe that knowledge is derived from experiment, observation, and experience. To put simply, the default perspective of empiricists is “prove it to me.”
This mindset has helped me tremendously in perfecting my investing process for the last twelve years.
Here are two pieces of wisdom I’ve learned from these enlightened philosophers:
Be a Ruthless Skeptic
Hume wrote extensively about skepticism, the school of thought that seeks to question the possibility of certainty of knowing.
At it’s core, skepticism focuses on the suspension of judgement as a result of a lack of evidence, and denying that one can assume omniscience.
He observed aspects ranging from past experiences (“induction”) to human perceptions. At one point in Treatise, Hume even became even a fierce skeptic of his own theories and ideas.
My largest lesson learned from the Scottish philosopher is that no ideas are ironclad; even our best theories and thinking can bring doubt and contradictions. One must become a skeptic of his own ideas, eliminating as much doubts and weakness, and revising so you can establish the best investment thesis, while constantly testing them for flaws.
This is the best way to avoid investment traps such as confirmation bias or "emotional reasoning."
Investing Skills Are Not Innate
Investing skills must be learned because no one is born with the innate ability to pick winning stocks. John Locke taught me that knowledge is determined only by experience derived from perception.
In investing, we obtain knowledge in different forms, from personal failures and resounding successes, to mentors and research.
The more experience an investor has, the more efficient he is in filtering data and judging investment opportunities. Warren Buffet is an example.
Another important lesson from Locke is introspection. He advocates the observation of emotions and behaviors of one's self.
Most investors have a knack for piling into winning trades and exiting when their investments do poorly.
Others confuse passion and interest in industries with rational knowledge, again resulting in large losses when they think with their heart rather than their mind.
These forms of emotional investing are very dangerous to your well-being, and your pocket. It is critical that you understand yourself and your reactions when investing.
How I Can Help You Win
Inspired by the wisdom of these two eighteenth century philosophers, I created financial portfolios and tools to help investors easily develop lucrative investment opportunities, eliminate emotion from your investment process and, most importantly, profit handsomely from prolific growth in developing nations and regions.
Asia 360 is an exclusive Asia-centric portfolio with boots-on-the-ground perspectives that provide our premium members comprehensive information on the up-and-coming profitable opportunities in the largest Asian stock exchanges.
Capital Deployment Portfolio is our most advanced proprietary investment portfolio, which tracks liquidity and its utilization in your favorite and most active global markets.
Commodity Investment Portfolio is the best resource for commodity traders and investors to understand and track bull and bear markets in twelve different commodity markets.
My intent is to provide to you my years of experience…years I’ve spent learning, observing, hypothesizing, and refining.
This is knowledge that is gained in time, not granted by luck of birth. Armed with this, I’m sure you can be as successful in investing as I am.
The Proof is in the Pudding
But don’t just take my words at face value, Hume and Locke will not approve.
You must look at the evidence, the truth that you can decipher for yourself.
Let’s take silver for example:
In November of last year, our Commodity Investment Cycle Index gave a “buy” signal for Silver, which has been on a bear market since 2014.
The result? A 46% return in three months!
We generated this position using one of our proprietary models, Commodities Investment Cycle, which tracks the long-scale cyclical nature of commodities companies.
Essentially, we use commodity price as a driving indicator of overall demand, and compare this against the deployment of capital by the industry, thereby defining not just the commodity cycle, but also the relative standing of specific companies within this paradigm.
And I want to pass this ability to you.
Being an investor and money manager for the last twelve years, I understand deeply the concept of “skin in the game.” At One Road Research we value experience and results over “certificates.”
That’s why, for a limited time we’re offering FIVE STOCK SHEETS FOR FREE
With these stock sheets, you will have actionable items to start investing and making money right now!