"The Power of Common Sense - The Foundation of Crossing Stages"
I. Avoiding Self-righteousness
Common sense is the simplest yet extremely important, it helps in decision-making and self-awareness.
Suppose 1: Feeling it's difficult to make money and often losing money in investments;
Common sense: Either there was no opportunity to begin with, or my understanding is lacking and I have limited information.
Suppose 2: Feeling "nobody understands this project better than I do," but ultimately not making money or even losing money;
Common sense: It's highly likely that there are blind spots in my thinking or information.
Suppose 3: Having significantly different opinions from someone else on industry, trends, projects, or any other aspect;
Common sense: There must be a significant difference in understanding between both parties, to the extent that the one with higher understanding can easily identify many issues.
In scenario three, the person with lower understanding, due to their significant knowledge gap, cannot comprehend higher-dimensional matters. Within their thought framework, they will definitely consider themselves as the "higher" party.
So how to avoid becoming this "self-righteous" fool? It can also be viewed from the perspective of common sense: from the perspective of the coin circle, if the other party has a better understanding of investments, industry, trends, and projects than I do, then when I have major differences in opinion with them and I think they are wrong, then it's highly likely that "I am wrong."
II. Thinking Generates Value, and Also Produces Errors
When humans think, God laughs.
Judging from common sense, a better answer is simply a result of higher-quality information acquisition and more efficient processing, which makes it easier to produce good answers.
Why is this common sense so difficult to adopt universally? Because each of us is thinking when making decisions, and those with limited information and low processing efficiency are often less likely to realize that there are issues with "their own thinking."
Humans cannot know everything, and thinking always has its flaws. Everyone will continue to make mistakes, regardless of their level of understanding—good information acquisition and processing only serve to reduce the probability of making mistakes.
What constitutes good information? Different opinions or viewpoints from others are an important part of it.
A good thinking model should welcome different opinions. Although the decision is ultimately yours, the more diverse opinions you have, as long as your information processing model is sound, or you have the ability to process information, the more helpful it will be for decision-making.
For example, when you find that someone else's thinking differs from yours, you can first assume that you might be wrong.
Interestingly, in bloated organizations, especially in environments where bureaucracy prevails, the prevailing thinking model is often: "I am the superior, I am smarter, you just need to execute."
This logic has significant flaws, but superiors are happy to implement it, and subordinates dare not oppose it, so it easily becomes widespread.
However, common sense dictates that everyone makes mistakes, and the probability of making mistakes depends only on the quality of information and the processing system—leaders may be smarter, and there is a reasonable side to this, such as having more sources of information and more experience. However, in most scenarios, this is far from enough. Most people's experiences are outdated, and it's often said that someone has 10 years of experience, but it's very likely that they have only one day of experience repeated for 10 years.
When ignoring objective facts and external changes, and trying to judge and handle new things with old experiences, despite "racking one's brains" in thinking, these thoughts are likely to be ineffective.
Of course, each of us can become this person—even though we are evolving every day, what should we do?
III. Optimize Output by Improving Input First
From the perspective of common sense, errors can only be avoided, not eliminated, and the best way to avoid them is to optimize output.
In the model of "I am the superior, I am smarter," from the perspective of common sense, it is clear that the greatest difference between people is not rank and position, but the difference in information processing and thinking models.
This difference allows excellent individuals to become superiors, but just because they are superiors does not mean they naturally and continuously believe "I am smarter." They still need to maintain an open mind at all times.
The most important aspect of an open mind is still common sense: the less information you have, the more blind spots you have; the worse your model, the dumber your decisions.
If Lei Jun wants to make cars, then he had better become the person who understands cars the most. Therefore, he has accumulated tens of thousands of words of notes, drifts dozens of laps in a day, and test drives hundreds of cars. Lei Jun understands cars, not because he is the CEO of Xiaomi, but because he still needs to put in the effort.
What's more terrifying than not understanding is thinking you understand, and this is when you must use common sense to judge.
For example, to evaluate someone's investment level, from the perspective of common sense, you only need to see if their investments consistently grow their wealth.
A person who consistently earns a lot of money through investments is only a few scenarios: they are lucky, have high understanding, or a combination of both.
In investments, it is relatively easy to judge, but it seems there is often controversy. Those who consistently fail to make money tend to believe that they are just "unlucky," while successful individuals are simply "lucky."
Therefore, on platforms like Snowball, there are always discussions about the stock market masters like Warren Buffett and Duan Yongping, and on platforms like Douyin, there are always discussions about the experts pointing out the flaws of Pinduoduo, JD, and Taobao.
The less input you have, the harder it is to discover your own mistakes.
Why is there always no shortage of opportunities in the coin circle? It's because in the early stages, most people lacked investment experience, creating an inefficient market, resulting in more opportunities.
IV. Simple and Useful Common Sense
There are many pieces of common sense that have greatly benefited me, such as:
- Correct errors immediately, the earlier the correction, the smaller the cost.
Simple and straightforward, but widely applicable.
For example, in investments.
Protecting capital: What do you do when your capital is likely to be lost?
Position management: What do you do when your position makes you feel like you bought too much during a downturn and always feel like you bought too little after an increase?
Buying and selling: What do you do when you always mess up short-term trades?
For example, in life:
Dealing with bad people always leads to unfavorable results, what do you do?
Discovering something is wrong and has already started to produce unfavorable results, what do you do?
For example, at work: What do you do when you find an employee is not meeting expectations, or when you find a mechanism has issues?
For any mistake, the best approach is to correct it immediately—only the method of correction may vary, but the core is still that the earlier the correction, the smaller the cost.
- Don't invest if you don't understand, don't act if you don't understand
In investments, not investing if you don't understand is common sense. However, most people in investments like to study whether "others understand," and have a strong tendency to follow others. Initially, they think they should follow a certain target, then they want to follow a certain amount, and later they want to follow a certain position percentage. When they incur losses, they even question why it wasn't as great as they were told.
"Human beings can do anything to avoid thinking." They don't want to understand the project, the logic, or the market changes, they only want to understand how others are investing. This strange way of thinking is widespread.
In life, it's common sense to not meddle if you don't understand. If you want to express an opinion on something, or even manage it, either first understand and become an expert, or be cautious in expressing an opinion. A long time ago, I knew someone who, no matter what anyone said, would think of some critical comments from a different perspective, always ready to "share a few words." At first glance, it seemed very clever—but from the perspective of common sense, the more one thinks they know everything, the more ignorant they are.
The more one knows, the more open-minded they become, and the more they care about common sense; the less one knows, the more closed-minded they become, and the more they care about rank.
- Discovering errors is not a skill, making fewer errors is the ability
Are there perfect investors? There never will be. Even someone as strong as Warren Buffett has many mistakes when looking back at himself 30 years ago or 3 years ago. When asked "What mistakes have you made?" he would laugh and say, "How much time do you have?"
Whether an investment is right or wrong can ultimately be determined by the results, it's very clear— you can make many mistakes, but as long as your profit curve is continuously rising, it means you are doing very well.
This means that the person has made "fewer mistakes," but most people are only good at "finding mistakes."
Even for this same investor, if they manage a fund and need to report why they bought or sold, and explain to the fund's investors why a certain operation resulted in a loss, their investments will immediately become difficult, and even if the investment results are still good, they will be criticized by investors at certain times.
And when faced with criticism, there is no need to explain, and it won't be understood, because everyone is focused on different points. Investors emphasize that you made a mistake in this operation, and what you can explain is that mistakes are inevitable—but who wants to hear that?
Many things are hard to distinguish between right and wrong, it's just differences in knowledge, perspectives, and thinking models.
In a good system, errors can be tolerated, and the focus is on the main line; in a poor system, even the Monkey King must constantly review himself at democratic life meetings, focusing on discipline, organizational skills, occasional impatience, and lack of innovation.
The more concentrated, the more efficient, but it also tests the decision-maker's level.
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Common sense is very important, but it is not a sufficient condition.
Common sense simply helps us make fewer mistakes and correct them immediately when discovered.
At any moment, we could be that self-righteous person, so we must remain self-aware.
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