STREET DOGS: It’s do-able, if you’ve got an edge

From Charlie Munger:

 Every person has a circle of competence. And it’s going to be very hard to advance that circle. If I had to make my living as a musician, I can’t even think of a level low enough to describe where I would be if music were the measuring standard of civilisation.

So you have to 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 certain 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.

If you want to be the best tennis player in the world, you may start out trying and soon find that it’s hopeless — that other people blow right by you. However, if you want to become the best plumbing contractor in Bemidji, that is probably do-able by two-thirds of you. It takes a will. It takes intelligence. But after a while, you’d gradually know all about the plumbing business in Bemidji and master the art. That is an attainable objective, given enough discipline. And people who could never win a chess tournament or stand in centre court in a respectable tennis tournament can rise quite high in life by slowly developing a circle of competence — which results partly from what they were born with and partly from what they slowly develop through work.

So some edges can be acquired. And the game of life to some extent for most of us is trying to be something like a good plumbing contractor in Bemidji.

The good news is that the stock market is filled with opportunities, and most people — if they have the will — can carve out an advantage in some small corner of the market.