In this episode we talk about why taking advice from conventional people can be dangerous.
There's a huge discrepancy between theory and practical application, and when you take advice from someone that is conventional again, the norm ease and they rely on theory to give you advice. It can be dangerous, so I'll give you a quick example of how this could be dangerous. Remember planning a trip with a friend who has an engineering background, so they rely on theory very heavily, And when we were planning the trip, we're planning a trip to the beach. The beach, Theoretically, if you look on Google maps is about 30 minutes away. But practically it would probably take you a lot longer because Google maps sometimes don't update for a lot of the things that happen along the way.
So this is particularly in Mexico when where you're driving, sometimes roads can disappear, or sometimes you might have unusual amounts of traffic, or a strike or something will happen where you are definitely not going to get to your destination within 30 minutes. And if you are planning your entire journey based on that theory that it's going to take you 30 minutes based on that expectation, you are going to be disappointed, my friend. So When we think about theory, there's actually a lot of ways where theory can be foiled, and one in particular Andrew Carnegie, for example. I think the conventional notion is you put your eggs in several baskets so you can protect your eggs, right? And they say Diversification is is the way you go And business school professors will have done the math to show you why Diversification is so important and even Wu-Tang is coming out there and saying, Diversify your bonds So we know that diversification is conventional.
However, Andrew Carnegie, I mentioned him a little bit earlier. He has, she says, the opposite. Andrew Carnegie says, Put all your eggs in one basket and watch that basket. And I particularly like to subscribe to that level of thinking, because what I do know is when you start splitting your focus among different things, you're going to drop all those Baptist. It's so much easier to focus on one basket and just protect that basket versus putting all your eggs and 100 different baskets, forgetting where these baskets are not being able to take care of any of these baskets.
And so, in theory, diversification might seem like it's solid advice, but in practice is that the case? So take any kind of theory with a grain of salt. Try to realize or try to figure out if it's really going to work for you and, you know, use it as a rule of thumb. Don't use it as a diehard rule that you have to that you absolutely must follow. Just, you know, the math behind it. You know it makes sense, but in practicalities, you know yourself better way more than a mathematician does, because the mathematician's model is only focused on one part, and you are a complicated human being in a complicated person living in a very complicated world. And sometimes those math models don't work out. So don't just rely on theory. Think about the practical applications because I think this quote will sum it up very nicely. Everyone has a plan until you get punched in the mouth. Mike Tyson. I'll see you guys in the next episode.
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