HUMMONEY - The Brain Debate (Perspective)

- by Greg Lewin

Josh Waitzkin wrote, “Depth of knowledge beats breadth of knowledge everyday because it opens a channel for the intangible, unconscious and creative components of our hidden potential.”  He also wrote, “…not only do we have to be good at waiting, we have to love it. Because waiting is not waiting, it is life.”

These 2 thoughts from Josh Waitzkin, who was first profiled in the movie “Searching for Bobby Fischer,” help us launch a brief discussion of how the internet impacts our thought process and ultimately our ability to invest. 

PRO: Collective Intelligence: The notion that what determines the inventiveness and rate of cultural change of a population is the amount of interaction between individuals. Once human progress started, it was no longer limited by the size of human brains. Intelligence became collective and cumulative (Matt Ridley).

CON: Only when we pay deep attention to a new piece of information are we able to associate it meaningfully and systematically with knowledge already well established in memory (Eric Kandel). When we’re constantly distracted and interrupted, as we tend to be online, our brains are unable to forge the strong and expansive neural connections that give depth and distinctiveness to our thinking. We become mere signal-processing units, shepherding disjointed bits of information in and out of short-term memory (WSJ).

In reality both arguments can be very supportive of the internet as a powerful medium for development, growth and change. But in application the tool, too often, dictates, rather than serves, investor behavior. The brain is infinitely complex, invested with boundless potential. However, the 2 arguments above combine to suggest that when the tool is not managed the power of the brain becomes diminished. Nicholas Carr writes, “The average web page entices us with an array of embedded links to other pages, which countless users pursue even while under constant bombardment from email, RSS, Twitter and Facebook accounts… We lose the ability to transfer knowledge from short-term “working” memory to long-term memory, where it can shape our worldviews in enduring ways.”

Patience and insight, invested with a command of the facts, will foster investor success. Therefore, we are compelled to both attach ourselves to the Collective Intelligence as well as detach ourselves from this cultural/intellectual phenomenon to engage the power of our individual intelligence. As we have counseled in the past, this is no easy task. There is an infinite array of media and business sources invested in your ever increasing attachment to the web in all its varied devices.

Josh Waitzkin has achieved enormous success in both the worlds of chess and martial arts. On the surface, they seem to be extraordinarily different disciplines, yet at the core, they are very much the same. His mastery evolved from his ability to learn and adapt. He harnessed the capacity to process vast amounts of information, create important relationships and find the space to be creative and insightful. This is the balance we wish to achieve as investors, both attached to the internet and at the same time apart. 

- The views expressed here are of the author, HUMMoney contributor Greg Lewin; currently a General Partner at TLF Capital, an investment management firm. During the past 26 years he has been a senior money manager or partner in Wall Street firms including Neuberger Berman, Charter Oak Partners and Sailfish Capital.