- John Hawver

# !Pi

Today is Pi day! One of my favorite numbers. This post should be about Pi, and it is, but not completely. I have however posted a great gif, done by my oldest son to commemorate Pi Day this year.

Today I can’t help myself and wanted to expound on a common saying I recently read from Charlie Munger: “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

Charlie certainly didn’t come up with this concept on his own, but he and Warren have applied it to fantastic financial results.

Let’s re-frame this concept in two ways. First, statistically, if you focus on removal of mistakes in investing, this should eliminate some of the worst of your returns, essentially clipping off the left edge of the distribution like the below plot and moving the mean and median of your returns upwards.

Secondly, Charlie is telling us to focus on what we control, on removing or minimizing our unforced errors, errors that we choose to make and are in our control. This a very Stoic concept: focusing on what is in one’s control and accepting what is not.

Warren tends to state this in a different way by saying it’s important to know where your circle of competence is, and is not. This implies that you have much better control over what is inside your circle and hence better results should follow.

So on Pi day, know your circle ... and where it is not.