German meteorologist and geophysicist Alfred Wegener described his theory of continental drift before the Geological Society of Frankfurt in 1912. He later expanded his theory in a book called, The Origin of Continents and Oceans, which he published in 1915.
Wegener’s theory was a wacky one at the time, but geologists today recognize that it explains, with some important modifications, large swaths of the geologic record. It is nearly impossible to fully describe anything geologic today without first considering that the continents were once together and are now apart. Wegener’s theory changed the way geologists think about geology.
Wegener had no formal education in geology. He was an astronomer by training and a meteorologist in practice. He collected no data of his own. He likely never picked up a single fossil. He relied purely on the data others collected but drew his own conclusions.
What Wegener did to geology, Charles Darwin did to biology. Darwin’s theory of natural selection changed the way biologists think about biology. Darwin, like Wegener, had no formal training in the science he revolutionized. He, too, drew heavily on the observations of others. He spent a lifetime sitting in his study at Down House, thinking and contemplating.
Albert Einstein also relied heavily on other people’s data; he leaned on the data and observations of scientists like Max Planck and Heinrich Hertz to develop his theories on relativity and the photoelectric effect. He nevertheless changed the way physicists think about physics. He was just 26 years old and worked for the Swiss Patent Office when he developed his theories.
What we have here are three master observers. This unlikely trio of scientists—a geologist with no formal training in geology, a biologist with no formal training in biology, and a 26-year old kid working for the Swiss Government—each fundamentally changed the way we think about a science. None of them had any proprietary data. They had no secret formula, fancy machinery, or special equipment. The one thing they had in common was the power of observation.
The main thing these three master observers brought to the table was their ability to think. They observed. They took in data. They sat and thought about what could possibly explain the data they were seeing.
Richard Feynman, himself no slouch when it comes to the power of observation, once said that if you are putting ideas together that are vague and hard to remember, you have to somehow create big chunks of time to think. If you are interrupted, he said, you forget stuff. If you forget stuff, you can’t integrate.
Each of these great observers somehow found big chunks of time to think. Fate gave each of them a little island of peace and tranquility to think and observe. Wegener and Einstein each had jobs, but those jobs were boring for them and not taxing, allowing them to devote large chunks of time to their main passion. Darwin never had a paying job in his life. Family wealth gave him the opportunity to live comfortably while spending nearly every day of his entire life, sitting and reading and thinking.
We think there is a lesson here for investors. Investing, after all, is nothing more than converting observations into theories. We observe what is going on around us and construct theories on what could possibly explain those observations. The closer our theories come to reality, the better and more informed our investments.
In order to solve complicated investing problems better than our competition, we believe we need to take a page out of the books of the master observers. At KP7, we organize our lives to create big chunks of time to actively think about investment problems that make a difference.
