"Not all those who wander are lost." - JRR Tolkien
One of the most frequent monsters in investors' collection of nightmares is "thesis creep." This is when the dynamics have changed to the point where you can barely recognize the original reasons why you invested in the company in the first place. We are witnessing thesis creep in TripAdvisor's (TRIP) hotel business as we speak.
But as it happens, I also just finished listening to a terrific book, The Beginning of Infinity (thank you to Dan Roller at Maran Capital, if you're reading this!) in which physicist David Deutsch explains that the fundamental way humans have grown is by generating ideas. Generating ideas doesn't come from data analysis, it comes from creative, right-brain thinking. As psychologist Gary Klein has shown, insights come when we least expect it, but they come from original thought, not by analyzing data. And those original ideas need to be tested and criticized in order to be validated and improved upon. The beginning of "unlimited knowledge growth," lies in the concept of fallibilism. Only through correcting misconceptions from the past and hoping to find and change mistaken ideas that no one today finds problematic, can we initiate the process of "unlimited knowledge growth," as Deutsch writes.
Now, I completely understand that thesis creep could identify subjective bias in an investor, and thus investors are correct to throw a red flag whenever he or she realizes it's happening. Yet, as psychology Professor Daniel Kahneman has advised, truth seekers who've developed a process and an algorithm to help eliminate noise have taken a major step at improving the signal of information coming to that otherwise inherently biased human. While algorithms can help filter noise, the real world is inherently more complex and demands flexibility in judgement. Thus, we've found the only way our framework has been useful
