In investing, there is a concept called "Second-Level Thinking." It is the difference between average returns and building crazy wealth.
First-level thinking is simplistic: "This company has a great product, I should buy it." It is intuitive but because it’s obvious to everyone, there is no edge there.
Second-level thinking goes deeper and you need to ask uncomfortable questions: "Everyone likes this product, but are expectations too high?" "This news looks bad, but is the market reacting to noise is there a significant shift? what are people missing?"
If your view is the same as the consensus, your returns will be the same as the average. To win, you have to think differently.
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To win, you have to think differently.
In investing, there is a concept called "Second-Level Thinking." It is the difference between average returns and building crazy wealth.
First-level thinking is simplistic: "This company has a great product, I should buy it."
It is intuitive but because it’s obvious to everyone, there is no edge there.
Second-level thinking goes deeper and you need to ask uncomfortable questions:
"Everyone likes this product, but are expectations too high?"
"This news looks bad, but is the market reacting to noise is there a significant shift? what are people missing?"
If your view is the same as the consensus, your returns will be the same as the average. To win, you have to think differently.