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Wisdom is knowing the limits of your knowledge

What does it mean to be wise? What is Wisdom?

One of the more interesting aspects to wisdom is self-awareness. “Thinking about wisdom,” writes Stephen Hall in his book Wisdom: From Philosophy to Neuroscience, “almost inevitably inspires you to think about yourself and your relationship with the larger world.” The book is an investigation into fuzzy questions such as how can it help us shed light on the process by which we deal with big decisions and dilemmas.

He writes:

Wisdom requires an experience-based knowledge of the world (including, especially, the world of human nature). It requires mental focus, reflecting the ability to analyze and discern the most important aspects of acquired knowledge, knowing what to use and what to discard, almost on a case by case basis (put another way, it requires knowing when to follow rules, but also when the usual rules no longer apply). It requires mediating, refereeing, between the frequently conflicting inputs of emotion and reason, of narrow self-interest and broader social interest, of instant rewards or future gains. Moreover, it expresses itself through an insistently social vocabulary of interactive behavior: a fundamental sense of justice (which is sometimes described as an innate form of morality, of knowing right from wrong), a commitment to welfare of social (and, for that matter, genetic) units that extend beyond the self, and the ability to defer immediate self-gratification in order to achieve the greatest amount of good for the greatest number of people. (more…)

Socrates on Success

“Once A young man asked Socrates the secret of success. Socrates told the young man to meet him near the river the next morning. They met. Socrates asked the young man to walk with him into the river. When the water got up to their neck, Socrates took the young man by surprise and swiftly ducked him into the water.

The boy struggled to get out but Socrates was strong and kept him there until the boy started turning blue. Socrates pulled the boy’s head out of the water and the first thing the young man did was to gasp and take a deep breath of air.

Socrates asked him, “what did you want the most when you were there?” The boy replied, “Air”. Socrates said, “That is the secret of success! When you want success as badly as you wanted the air, then you will get it!” There is no other secret.”

Truth and Trading

Recently I’ve been listening to The Teaching Company CD’s while I work out. I was particularly intrigued by a discussion of Meditations by Marcus Aurelius, a Roman Emperor who had always wanted instead to be a philosopher. His philosophy could be summarized in this way: Get out of bed, do your duty, and appreciate things along the way. Not bad.

He believed in certain absolute values for living, and chose the values of Socrates which are truth, justice, courage, moderation, and wisdom.

Asking myself how these values impact trading I came up with some new insights. But first let’s look at how Marcus Aurelius defined these values. Professor J Rufus Fears, who teaches the course on “Books That Have Made History: Books That Can Change Your Life” explained it the following way:

1. Truth: Truth is an absolute value. Some things are true in all places and times. Resisting evil, for example, is always right.

2. Justice: Justice consists of treating others as one would wish to be treated. “Do unto others as you would have them do unto you” summarizes this concept of justice.

3. Courage: Courage means standing up for justice.

4. Moderation: Nothing should be carried to excess.

5. Wisdom: Wisdom enables a person to know what justice is, to recognize when courage is required, and to do what is right.

So how do these values play out in our trading? In this column, let’s explore truth as it applies to your trading. (more…)

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