Consider the Longevity of the Knowledge You Consume

While most of us focus on consuming information that we won’t care about next month, let alone next year, Buffett focused on knowledge and companies that change very, very slowly or not at all. And because the information he was learning changed slowly he could compound his knowledge over time. And as Schroeder notes, Buffett has been in business for a long time, giving him incredible opportunities to create a cumulative base of knowledge. Expiring information is sexy but it’s not knowledge....

 Entropy in our Everyday Lives: Active Stability

Because things naturally move to disorder over time, we can position ourselves to create stability. There are two types of stability: active and passive. Consider a ship, which, if designed well, should be able to sail through a storm without intervention. This is passive stability. A fighter jet, in contrast, requires active stability. The plane can’t fly for more than a few seconds without having to adjust its wings. This adjustment happens so fast that it’s controlled by software. There is...