Stick To What You Know
For some unknown reason, there appears to be a common misconception perpetuated throughout society. One that believes that as individuals, each of us must have an answer, opinion or belief on absolutely everything. That if we don’t understand the in’s and out’s of everything from politics to pop culture, that we’re at best ignorant and at worse a complete imbecile.
Of course, it would be remiss for me to not mention that I have made this mistake countless times — where I would speak about or form opinions on subjects of which I had little to no understanding of. Yet, it wasn’t until I learnt about the concept of a circle of competence that I came to realise that thinking we always need to have an answer or know about absolutely everything is completely illogical. In reality, no one individual can be good at everything, nor can they know everything there is to know.
“Everybody’s got a different circle of competence. The important thing is not how big the circle is. The important thing is staying inside the circle.” — Warren Buffett
When it comes to one's circle of competence, embracing it simply means to identify and stick to that which you know, and are good at. To focus on your strengths and areas of expertise, and to put all your eggs in that basket and watch that basket grow.
Which then begs the question, how does one identify their circle of competence? Well, to know how to do this, I refer you to the words of Charlie Munger who, so eloquently stated ...
If you have competence, you pretty much know it’s boundaries already. To ask the question (of whether you are past the boundary) is to answer it. Basically, if you have to consider whether you are or aren’t competent at something, you most likely aren’t.
Simply put, each of us whether from experience or study already possess knowledge on certain topics and subjects. These are subjects and topics that we know, and are good at. They are ones that we have an in-depth understanding of and can discuss with relative ease.
However, in wanting to accurately identify your circle of competence it’s also imperative to consider that which you don't know and aren’t good at. Furthermore, and perhaps most importantly, one should also consider that which you think you know and think you are good at but don’t know and aren’t good at — as this area is where the most mistakes are made and as such should be avoided.
When it comes to applying this concept to one’s life, it’s applicable in just about every area. Where if there is a topic or subject that you don’t know it’s better to seek guidance from someone else whose circle of competence that topic or subject falls in. For example, if you have little understanding of exercise and nutrition but want to improve your fitness you should then work with a professional whose area of competence that falls in.
All in all, the idea of focusing on your circle of competence is simple … Identify and define that which you know and are good at, and focus your efforts on operating and expanding your knowledge within those areas. While over time you may work to expand your circle of competence, always be aware of where it’s boundaries lie and be ready and unafraid to point out that which is outside your circle.
As in the words of Charlie Munger … “Figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don’t, you’re going to lose. And that’s as close to a certainty as any prediction that you can make. You have to figure out where you’ve got an edge, and you’ve got to play within your own circle of competence.”