“What is elementary, worldly wisdom? Well, the first rule is that you can’t really know anything if you just remember isolated facts and try and bang ‘em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form.”
— Charlie Munger
For me, one of the best definitions of wisdom is being able to see the end at the beginning. The ability to think deeply and to ponder second and third-order effects from particular actions and the interplay of multiple variables and how they may play out either through probabilistic thinking or gut feel can go a long way to avoiding major errors and capitalizing on compelling opportunities. Charlie Munger is a big believer in having a multidisciplinary approach to gaining worldly wisdom. He believes that it’s important to be conversant in powerful mental models to help develop “a latticework of theory” to craft a feel for how things may unfold. To do this effectively requires broad thinking and a curious mind that seeks knowledge from many different disciplines.
Charlie Munger on Worldly Wisdom
The Farnam Street blog is a wonderful resource for thinking about thinking, particularly when it comes to Charlie Munger. This is from its post on worldly wisdom:
In his book, Charlie Munger: The Complete Investor, which has become my new go-to recommendation for people interested in an introduction to Munger’s thinking. Griffin lays out Munger’s path to worldly wisdom.
Munger has adopted an approach to business and life that he refers to as worldly wisdom. Munger believes that by using a range of different models from many different disciplines—psychology, history, mathematics, physics, philosophy, biology, and so on—a person can use the combined output of the synthesis to produce something that has more value than the sum of its parts.
Robert Hagstrom wrote a wonderful book on worldly wisdom entitled Investing: The Last Liberal Art, in which he states that
“each discipline entwines with, and in the process strengthens, every other. From each discipline, the thoughtful person draws significant mental models, the key ideas that combine to produce a cohesive understanding. Those who cultivate this broad view are well on their way to achieving worldly wisdom.”
I have always been impressed by people who can synthesize knowledge from different disciplines to make connections where they don’t obviously exist to generate profitable insights or convey new ways of seeing the world. The world of investments is perfect for acting on these insights because there are so many ways to do so and the results are pretty black and white (I made money, lost money, or broke even).
Despite being in a pretty focused and relatively simple business of apartments I think about many unrelated topics to try to assess how they may impact the supply and demand for housing, the cost of capital, growth in rents, interest rates, cap rates, investor demand for these investments, what locations will have relative advantages over time, tax policy, etc. To do this requires studying trends in politics, society, demographics, and consumer tastes along with geopolitical issues, history, Federal Reserve policy, capital flows, human nature, technological changes, etc. There is a lot to process but I would rather try to invest consciously then unconsciously and assuming that apartments will continue to do well because they have done well. That type of thinking led to millions of people investing and lending in housing believing it could never go down because it hadn’t gone down. This led to overinvestment in the sector which led to poorly underwritten loans which ended up defaulting which led to capital exiting and asset values collapsing which led to the worst downturn since the Great Depression. Everyone having the same beliefs can lead to a very crowded investment that can inflate into a bubble that eventually bursts. It can also keep everyone away and lead to depressed asset values that can offer great opportunities. From my perspective, we have to be constantly vigilant for where excesses of overinvestment or underinvestment are materializing to identify pockets of potential elevated risk and reward.
Robert Hunter on Wordly Wisdom
Because I am a naturally curious person and have admired people who can synthesize knowledge from different disciplines effectively I get a lot of value out of learning about deep thinkers from all disciplines, and not just in the world of investing. In addition to investors, artists are particularly adept at helping us see the world and ourselves in different ways through their artistic synthesis.
I bring this up because recently the lyricist for Jerry Garcia (and occasionally other Grateful Dead members), Robert Hunter, passed away at the age of 78. He was so good at his craft that even Bob Dylan asked him to write lyrics for him. Hunter was notoriously reticent to talk about what his songs meant because he felt that by doing so would detract from the personal relationship each listener could have with them. Once he has attached a meaning or message to them then his songs going from being ours to his and this is something he did not think was fair to do.
There was one time, however, that Hunter couldn’t hold back from explaining the meaning of one of his songs after a critic wrote a long-winded essay essentially saying that Grateful Dead songs were meaningless. Hunter felt that he had no choice but to defend his honor and he did so by doing a deep dive into one of the songs for which he wrote the lyrics, Franklin’s Tower. His analysis is a wonderful example of synthesizing knowledge from different disciplines to produce a work of art that will probably still be played 100+ years from now. What I also love is that, like all great works of art, there is a surface intent and a deeper message, and Hunter illuminates both in the analysis he provides. Because I can’t convey it any better than he, this is part of what he wrote in response to the critic that got under his skin.
What’s it about?
In another time’s forgotten space
your eyes looked through your mother’s face
Wildflower seed on the sand and stone
may the four winds blow you safely home.
[You have your mother’s eyes, child,
the very shape, color and intensity
of the eyes that looked through
her face so long ago. Borne on the
varied winds of chance and change,
like a dandelion seed, you may find
yourself deposited on barren soil.
My wish for you is that the forces
that brought you there may sweep
you up again and bear you to fertile ground.]
“In another time’s forgotten space
your eyes looked through your mother’s face.”
[Relative immortality of the human
species is realized through reproduction.
Dominant traits inherited from an ancestor,
the lyric suggests, share more than mere
similarity with those of the forebear,
but are an identity, endlessly reproducible.
In other words, when someone says
“You have your mother’s eyes”
they are not speaking in simile
nor would it be incorrect to say
that “your mother has your eyes,”
if, in fact, possessiveness is
an appropriate term in the context.
Poetic license will assume it is,
if only for the sake of moving on
to the next couplet.]
You ask me where the four winds dwell
In Franklin’s tower there hangs a bell
It can ring, turn night to day
Ring like fire when you lose your way
[note that this song appeared in 1975,
the year after my son was born and the
year before the American Bicentennial.
Both facts are entirely relevant. The
allusion to the Liberty Bell and the
situation of the Philadelphia Congress
in the hometown of Ben Franklin has not
gone unnoticed by other commentators.
This song is a birthday wish both for
my son and for my country, each young
and subject to the winds of vicissitude.
Individual and collective freedom,
liberty, conscience, all that is conjured
by those concepts, is suggested
in the image of the tolling bell.]
God help the child who rings that bell
It may have one good ring left, you can’t tell
One watch by night, one watch by day
If you get confused just listen to the music play
[The Bell, rung once, cracked and could not
be safely rung again. From an actual bell,
it therefore became a symbol of the
potential to ring. The single toll, signaling
birth, can now be heard only in its
reverberations in our history and ideals.
Some have had to bear those ideals in
difficult circumstances (war, the Great
Depression and general benightedness)
others have had the more enviable task
of keeping watch (eternal vigilance)
during periods of conscious and dynamic
change: the full light of day. The sixties,
the writer assumes, were such a time.
You can’t tell if ringing that bell
a second time would destroy it in
the act of producing another mighty
peal and it might be foolish, if courageous,
to try. Perhaps the “music”of
the original ideals symbolized by
the first and only toll should be taken
to heart and implemented, rather than
obviated by a new source of ideation
(communism, anarchy, religion based
governmental apparatus. etc.) To resolve
this confusion, pay attention to the
original inspiration (the Constitution,
the Bill of Rights, collectively.
Individually, maintain awareness of
conscience and one’s own early ideals.]
Some come to laugh their past away
Some come to make it just one more day
Whichever way your pleasure tends
if you plant ice, you’re gonna harvest wind
[This verse scarcely needs commentary
in light of the above remarks. The precursor
to the 1st couplet is “I Come for to Sing” as
performed, possibly written, by Pete Seegar.
The 2cnd couplet source is the biblical
“Who sows wind reaps the hurricane.”]
In Franklin’s Tower the four winds sleep
Like four lean hounds the lighthouse keep
Wildflower seed in the sand and wind
May the four winds blow you home again
[We assume a bell tower for the great bell.
By the trope of simile, we see the bell tower
(the day watch) turned to a lighthouse
and the four winds become sleeping hounds,
(the night watch) worn out by the events
of such a metaphorical day as related
by e.e.cummings in his familiar lyric
“All in Green Went My Love Riding”
(Poem 6 from TULIPS AND CHIMNEYS)
“four lean hounds crouched low
and smiling . . .” By the use of quotative
allusion the lyric attempts to borrow
some of the emotive spark of cumming’s
poem, providing a kind of “link button”
into a different but complementary space.
Allusion here functions as a sort of
shorthand cross-patch into a series
of metaphoric events which, with
a double-clutch shift of simile,
access a downloadable description of
the kind of day it’s been for a ‘wildflower
seed’ in its adventures in the wind.
There may be some objection to the
elastic interchangeability of the similes
of hounds and winds in this set of couplets,
but the test of the allusion, as I see it,
is whether or not the appropriate emotions
are evoked to lead to satisfying closure
and an opening door on other possibilities.]
[Now to the real stretch: “Roll away the dew.”
The line is appropriated from a fairly
well known sea chantey whose chorus goes:
“Roll away the morning dew
and sweet the winds shall blow.”
As surely everyone knows by now,
Bonnie Dobson’s song “Morning Dew”
(made famous by Garcia’s singing of it)
is set in the aftermath of nuclear war.
Reason he can’t “walk you out
in the morning dew, my honey”
is because of fallout, though Garcia
has wisely dropped the verse
containing this denouement, allowing
the song a heightened romantic mystery,
achieved through open-ended ambiguity.
For generations now alive,
the nuclear specter personifies
the forces which most threaten our
attempt at Jeffersonian democracy.
With the song’s sub-allusion to
“Roll away the Stone,” an anthem
of joyous Eastertide resurrection,
a resultant combination message
of dire necessity (as in the final:
you’ve got to roll away the dew)
and promise of renewal, in case
resolution is effected, are enjoined.
Should this hyper-allusive train
of thought become too confusing
to process, the invitation to just
“listen to the music play”
acknowledges both the melody
and performance context of the lyric
and the metaphoric bell described above.]
All I can say is wow! Every time I read his analysis I am more in awe of his immense talent and intellectual capacity and depth. He used evolution, genetics, Biblical references, ideals, literature, poetry, personal experiences, history, simile and metaphor, and symbolism to write a song of extraordinary depth and timelessness. It touches on so much of what it means to have a complete human experience. We are tied to particular histories and ideals and experiences that shape who we are and what we believe and he tapped into that so brilliantly.
Towards the end of his response he downplays what he has created and his brilliance by saying the following:
Well, now that you know what I meant by it,
it’s no great shakes is it? Mystery gone,
the magician’s trick told, the gluttony
for “meaning” temporarily satisfied,
one can now take issue with my intent
and avoid the song itself, substituting
the assignable significance for the music.
I must disagree with the eminent Robert Hunter here. To me, the mystery is only more enhanced. How he was able to take all of those inputs and put them into a witch’s brew concoction and come up with such a beautiful and timeless song is something that brings awe and wonder to me and that is an incredibly rare feat.
And if you found his analysis too long or complicated, then feel free to cut to the chase and, in Hunter’s words, “If you get confused, just listen to the music play.”