Dr Ajibola Awolowo
Stephen Curry! He is unarguably the greatest point guard in the entire history if the NBA. Just name the shooting record and I am certain he holds it having broken it multiple times in the past.
I stumbled on a video of a training session of the NBA team, Golden Tate Warriors. The video showed the routine of Stephen Curry as he practiced 3-point shots. I didn’t realise when my jaw hit the floor. If there is one man that has perfected his craft, it would be Stephen Curry. He made the shot time and time again from a variety of angles and a myriad of positions on the court. It was almost as if the man could not miss.
The amazing thing for me was seeing how effortless it all was. He did not pause to think of how to position his feet or how to hold the ball right. He just did his business at the subconscious level and it was a hit, back to back.
Watching this video brought back a memory that I had long locked away in a vault, hopefully never to be remembered. It was a sunny afternoon in Anthony Village, Lagos and I cannot exactly remember how I ended up on a basketball court in a compound on Abiodun Fasakin Crescent.
I am not sure why exactly but one of the players passed the ball to me. Maybe I looked like a distant cousin of Michael Jordan or maybe I had a confident look on my face which suggested I knew what I was doing. Anyway, the ball was with me and I didn’t want to disappoint my ancestors. I remembered all the basketball videos I had watched, how the players positioned their feet and hands. I felt I could make the basket. I knew I could make the basket.
I let the ball fly, and boy, did it fly! It flew over the rim, over the back board and straight into the next compound. Everyone looked at me like I was from another planet. Apparently, the neighbouring landlord loathes the noise from the court and never gives back any ball that unfortunately adventures into his domain. I ruined the game and their day. In contrast to Stephen Curry’s confidence that was backed by years of practice, my confidence was misplaced.
Being competent means having the requisite or adequate ability or qualities. One is said to be competent when they have the capacity to function or develop in a particular way. Competence is a spectrum that ranges from being grossly incompetent, like I was at basketball, to having god-like skills like Stephen Curry.
Let’s run through the various stages in the quest for mastery.
This is the lowest rung of the ladder and the most dangerous phase. Here, the subject knows nothing about a skill or a task but does not realise the depth of their ignorance. The unconsciously incompetent person may approach the task confidently having watched a few self-help videos or read a few books. They may have attended a seminar or two and feel they know enough about a task to accomplish it. In my basketball fiasco, I was the poster boy for unconscious incompetence.
Being at this stage is dangerous as the misplaced confidence makes the subject take unnecessary risks which exaggerates the potential for loss. Often, this loss proceeds from being a potential to being material. Many retail investors think they have cracked the code for investing. Having made a lucky profit here and there, they hold their shoulders high while having their heads stuck in cloud nine. They fail to realise that him whom the gods of investing want to destroy, they allow to make a profit in their first few trades.
This stage in the journey to competence begins when the subject realises that there is so much they do not know. The gods of investing have done their worst. Losses have been suffered and lessons have been painfully learnt. Just like when a balloon hits a sharp pin, the once high but unfounded confidence disappears in an instant.
There are 2 natural responses that may occur at the end of unconscious incompetence. The first is for the subject to crawl into their shell and give up. Unfortunately, the journey to mastery/ competence ends here if this path is followed. Fortunately for me, my ego, posterity and the NBA, I never touched a basketball after my ordeal. The second likely option is that the person develops a determination to fill the now identified knowledge gap. The subject embarks on a quest for in-depth knowledge. This is how learning begins.
After gradually amassing a knowledge base and building a thorough understanding of the skill or subject matter, wise decisions can now be made consciously. In this stage the person on the path to mastery will still need cues such as checklists/ routines which ensures that the accumulated knowledge and understood facts are taken into consideration each time a decision is to be made.
A retail investor at this stage will be best friends with an Excel spreadsheet and a financial model. There is no shame in referring to a set of rules you follow or some checklist you adhere to. Being reliant on your discounted cashflow model is a badge you must collect on the way to mastery. Wear it proudly.
The highlight of this stage is practice. There are no shortcuts here. Malcolm Gladwell in his seminal book “Outliers: The story of success” described this stage as the 10,000 hours of practice that is needed to master any skill or task. You just must put in the hard work.
Due to the knowledge base and constant practice, a person in this stage has built some competence as they would be inherently better at it than someone who is stuck in the stages discussed earlier. We must however realise that the holy grail is in the next stage.
Here, the person has had many years of experience/ practice based on the foundation of a proven knowledge base and good understanding of the skill. They have had so much practice that it comes to them naturally. They do not need to consciously run through a checklist or remind themselves to follow the process. They just perform the skill seemingly effortlessly. This is mastery!
Remember Stephen Curry sinking all those 3-point shots from all angles and positions one can imagine? That’s unconscious competence. For every single shot he sinks, he must have thrown similar shots in practice or in a real game, tens of thousands of times. His muscles now know how much of tension to generate for each movement, his feet automatically know how to position at each centimetre of the court and his hands just know how much force with which to throw the ball to make the basket from anywhere on the pitch without him needing to consciously think about it.
Charlie Munger, a prototype of an unconsciously competent investor, once said about Warren Buffett, “Warren often talks about these discounted cash flows, but I’ve never seen him do one. If it isn’t perfectly obvious that it’s going to work out well if you do the calculation, then he tends to go on to the next idea”. This is pattern recognition, which is a hall mark of mastery, at its best. Warren has only been practicing investing for the past 80 years.
In the past week, I saw a quote by Niccolo Machiavelli – “A sign of intelligence is an awareness of one’s own ignorance”. Where are you at present in the spectrum discussed above? In your day job, how are you faring? Do you feign competence but deep in your mind, you know you are far from it? If this is true for you, congratulations! You have now joined the ranks of the intelligent. Filling that gap is now your responsibility to yourself.
In investing, are you willing to put in the 10,000 hours of reading and practice to be able to hold your own? If you aren’t, I recommend you strongly consider buying an Index fund, an Exchange Traded Fund or a Mutual Fund managed by professionals as this would only require the discipline of consistency from you rather than the skill of investing while earning you average market returns at the least.
If you are willing to put in the hard work, I welcome you to this pilgrimage as we each try to chart our own course to mastery. May your road be rough and may you have your fair share of both calm waters and stormy seas.
Dr Ajibola Awolowo can be reached via: [email protected], and https://anchor.fm/value-nigeria