Broker Check

Sports, Complexity and the 10,000 Hour Rule

| August 29, 2013

The Lead Comment

In 2008, Malcolm Gladwell wrote a book entitled Outliers: The Story of Success.  In the New Yorker article linked below, he comments further:

“Forty years ago, in a paper in American Scientist, Herbert Simon and William Chase drew one of the most famous conclusions in the study of expertise: . . . . What Simon and Chase wrote forty years ago remains true today. In cognitively demanding fields, there are no naturals.”

Regular readers of mine may remember a bad “generic” joke – of which I use variations frequently, i.e. “There are 2 kinds of people in the world . . . People who think there are 2 kinds of people, and people who don’t!”

In this particular case, I’ll expand my rule of thumb as follows:  There are 3 kinds of people:

  1. People who accept the fact that a professional financial advisor would be useful to them.
  2. People who do not accept the fact that a professional financial advisor would be useful to them, even though an advisor wouldactually be useful.
  3. People for whom a financial advisor would factually not be useful!

Describing my professional opinion about which people fall into which category is beyond the scope of this note.  So now I’m only discussing those who accept that a professional financial advisor would be useful, and I’ll now refer to the 10,000 hour rule to provide some guidance on choosing a professional financial advisor.

In Gladwell’s article, he debunks some who feel there are large exceptions to this rule.  Gladwell’s view is achievement occurs when talent is combined with preparation.  And he further opines that at the highest levels, talent is actually less important.

Personally, and I’m probably not alone, I feel in athletics talent has a larger role.  Gladwell’s point, restated from above is that “In cognitively demanding fields, there are no naturals.”

So, when you are choosing a new, different, or additional financial advisor, in addition to the “typical” thought processes, e.g. recommendations, referrals, communication skills and “chemistry,” try to find out how much time, education and training your potential financial advisor already has chalked up.  If you need brain surgery, you probably don’t want to go to someone who just finished their fellowship – similarly if you want to have a high level of confidence – and probability of success – in generating current or future retirement income that meets your goals!

The How-To Articles

Sports, Complexity and the 10,000 Hour Rule  . . . . . New Yorker

The Finance – Economic – Political Articles

Why Retirement Risks Are Best Shared . . . Harvard Business Review

FINRA Slaps Morgan Stanley with $1M Fine on Transaction Prices . . . . Wall St. Journal

How Computers Took Over Trading . . . .

Other Reads

Simplify Your Future . . . .

“Be generous and expert, trustworthy and clear, open-minded and adaptable, persistent and present.”

Wonder Material Ignites Scientific Gold Rush . . . Wall St. Journal

‘Atom-Thin Graphene Beats Steel, Silicon; A Patent "Land Rush"’

Chinese Airlines Lure Pilots with Double the Pay of U.S. Captains . . . . Wall St. Journal

Household Income’s Slow Climb Back . . . . New York Times

Boston Metro Financial Advisor

If you’re looking for a Boston Metro Financial Advisor – or if you’re happy to work virtually – visit me at my Coolidge Corner office.  Or call or email me anytime with your questions!

Investments in securities do not offer a fixed rate of return. Principal, yield and / or share price will fluctuate with changes in market conditions and, when sold or redeemed, you may receive more or less than originally invested. The views are those of Bruce Mazo and should not be construed as investment advice. All information is believed to be from reliable sources; however, we do not make any representation as to its completeness or accuracy. Investors cannot directly invest in indices. Past performance does not guarantee future results.