The Framework Foundation

Nothing in this world can take the place of persistence. Talent will not: nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not: the world is full of educated derelicts. Persistence and determination alone are omnipotent.

Calvin Coolidge, 30th President of the United States


If our aim is to build an investment framework, then like any construction project, we need the proper foundations. Not just so the framework will last, but so it will be capable of constant renovation as both our knowledge and the state of the world change.

This foundation is built on three principles of learning:

1. Willingness to Learn

The key to pursuing excellence is to embrace an organic, long-term learning process, and not to live in a shell of static, safe mediocrity.

Josh Waitzkin, The Art of Learning


If you’ve got this far, its fair to say that you are interested in learning. But there is a difference between being interested in learning and being willing to learn. In her book Mindset, Carol Dweck highlights two different mindsets that people have regarding their personal traits, such as intelligence and personality. People with a fixed mindset believe their traits are given and that outcomes are a result of these traits. If they succeed its because they are intelligent, if they fail its because they are not. In contrast, those with a growth mindset, view their traits as things that can be developed with effort.

Successful learners not only have a growth mindset, but are willing to invest in their growth. In The Art of Learning, Josh Waitzkin¹ notes:

“what I am best at is not Tai Chi, and it is not chess – what I am best at is the art of learning”.

For Waitzkin and many other successful performers, learning is not a passive pursuit, it is active, conscious and deliberate.

2. Deliberate Learning

Practice doesn’t make perfect. Only perfect practice makes perfect.

Vince Lombardi, NFL Coach


If you are willing to learn, the second element of the foundation is how to learn. Whilst there are different tweaks on this, the message seems clear – learning must be a deliberate and conscious act. In Talent is Overrated, Geoff Colvin argues that the key to elite performance is what he calls Deliberate Practice:

  • It is an activity designed specifically to improve performance, often with a teacher’s help;
  • It can be replicated a lot;
  • Feedback on results is continuously available;
  • It’s highly demanding mentally; and
  • It isn’t necessarily much fun.

Waitzkin’s approach, whilst couched in more philosophical terms, is essentially the same. In an approach he calls making smaller circles, he champions depth over breadth:

“It is rarely a mysterious technique that drives us to the top, but rather a profound mastery of what may well be a basic skill set. Depth beats breadth any day of the week, because it opens a channel for the intangible, unconscious, creative components of our hidden potential”²

A key component of this approach, is a willingness to make mistakes in order to go forward.³ Waitzkin calls this “Investing in Loss” which led him to intentionally spar against bigger and better opponents or those he knew would play dirty in order to improve his technique.

For most readers, this philosophy is difficult to implement on a day to day basis where the realities of business performance don’t allow for ongoing on the job failures. In this case, the investment in loss must take place elsewhere.

3. Learning for task

So Plato, Aristotle, Socrates, I am not guided by them… I am interested in what works

Lee Kuan Yew, First Prime Minister of Singapore4


The third element of the foundation is what to learn. For investors this poses a dilemma. If you want to get better at chess – you practice chess; running – running and so on. So if you want to get better at investing, you need to practice – Investing! But how? Clearly the ability to replicate a given investment is difficult, if not impossible. For many trading strategies, feedback is delayed by months or years and is regularly clouded by statistical noise. Furthermore, “investing in loss” can carry unfortunate commercial and career practicalities.

As a result of these difficulties, investment education is often reminiscent of the drunk looking for his keys under the street light rather than where he lost them, because “that’s where I can see”. Too much education in investing is focused on things that are either easily taught and assessed, or that are interesting and entertaining:

  • Basic analytical skills and terminology.
  • Academic finance theories.
  • The techniques of other successful investors.

Learning and understanding these things will certainly improve your CV and probably your credibility in meetings. It may also be considered a necessary condition for you to become a better investor, much like a runner needs to learn how to tie their shoelaces before they can run.5 But this knowledge should not be confused with actual investment expertise, which is judged not on whether it sounds good, but the simple test of – Does it work?

Unfortunately, this website does not offer a silver bullet solution to gain investment expertise. No one book or blog can. Expertise must be gained with experience, including the inevitable investment in loss. What this website does hope to achieve is a means to accelerate that learning experience and to minimise the investment in loss. It aims to do this by making it easier for you to answer the simple quesitons – “What are the implications of this knowledge for investing?” and “How will I incorporate this knowledge into my investing framework?”. A willingness to keep asking and acting upon these questions is the Framework Foundation.

1. Waitzkin was the subject of the movie, Searching for Bobby Fischer. He was a former US National Chess Champion who subsequently became world champion in the martial arts form of Tai Chi.
2.  Waitzkin took this approach to extremes – “I focused on small movements, sometimes spending hours moving my hand out a few inches, then releasing it back.”  The full account of his approach bears many similarities to the outline of deliberate practice.
3. In Talent is Overrated, Colvin quotes a study of figure skaters that found that sub-elite skaters spent lots of time working on the jumps they could already do, whilst elite skaters spent more time on the ones they couldn’t. He estimates that gold medalist Shizuka Arakawa fell down 20k times in practice whilst perfecting her moves.
4. There are many exemplars of this idea, but for a good explanation of this quote see:
5. Note that even this is not a necessary condition as Usain Bolt proved by breaking the world 100m record running with his shoelace undone.