It feels like a paradox: the best way to learn* is to put together a high quality network of mentors and information sources, but it’s hard to assess that quality until you’re well up the learning curve. Fortunately, there are some reliable workarounds that can get you started. We suggest four simple steps to begin building a high-value learning network before you’ve gathered any expertise.
First, as the proverb goes, “know thyself”: what your temperament is, what your goals are and what you are both willing and able to commit (in terms of time and energy as well as money). The bad news is that you can’t possibly know everything about a subject, but the good news is you don’t need to. When it comes to investing, there are many people trading many different ways in different markets, and at least 80% of that information is not a fit for your style, goals and resources. Maybe 90%.
Second, understand the basic dividing lines by which people organize themselves so you can find a compatible culture. For high school students, it’s the jocks and the nerds and the cool kids. For traders, it’s the techies and the swingers and the fundamentalists and so on, often with a secondary grouping according to asset class. As you get comfortable you can shape your own identity, but initially choosing the culture most aligned with your strengths, interests and needs will reduce the number of exploratory dead ends and accelerate you down productive avenues.
Third, find a community that embraces your preferred culture and that offers a high degree of transparency. If you’re looking on the Internet, transparency means seeking out communities where people are inclined to use their real identities, explain their thought processes and share real transaction data while avoiding anonymous “thumbs up or down” chat rooms and prediction market sites. In general, when talk is cheap, listening is an expensive way to learn; when talk is more expensive, listening is among the best investments you can make.
And fourth, wherever you can, choose a community with a larger number of members (think thousands or tens of thousands). At a minimum this helps ensure a reasonable flow of information, since a very small percentage of community members regularly contribute to the network’s content. A larger community also increases the chances of encountering informative disagreements within established norms. Most importantly, though, a larger community can enable you to move beyond anecdote and theory toward statistically valid observations. And that move is a game-changer which impacts not only how you learn from your network but what you learn – as well as how much.
That should get you started. As you begin to learn, you should eventually participate in the network and, of course, start making real investments. Then don’t forget to go back and revisit what you initially thought about yourself, the different cultures and the various communities. It’s true you can assemble a good learning network without much knowledge of the space, but building a great one involves using what you learn to go back and revise some of your initial ideas. A network that is learning makes for the best learning network.
* “The best way to learn” here is assessed in terms of ROI or efficiency; the most effective way to learn anything in the long run is, of course, by jumping in.