Looking For Things that “Don’t Make Sense”

I was listening to a podcast episode today (Episode #210: Becoming the Best Version of You of The Tim Ferris Show) in which Tim Ferris interviewed 3 successful people:

  • Chess prodigy, Joshua Waitzkin
  • NY Times best-selling author, Ramit Sethi
  • Creator of the Princeton Review, Adam Robinson

One moment of the interview was deeply fascinating to me, and it was when Adam Robinson was discussing his weekly routines and how he prepares for the start of a new week. Aside from meditating, working out, and doing other activities to keep him mentally and physically sharp, he discussed how he writes a list of what he expects (i.e. his expectations) and looks for things that “don’t make sense.” Here’s the excerpt from Adam Robinson:

..and then I start to write down what I expect to happen. I think the key to, certainly in investing, is to have expectations and wait to be surprised. And one of the key things in investing, and I don’t know how many of you invest, and this is a life truism is to be aware of a voice in your head that says, and you’ll usually squint your eyes or you’ll hear someone say the following words: “It doesn’t make sense..” And that’s always a sign of something really powerful.

So if somebody says to me, “It doesn’t make any sense why gold keeps going lower,” I know that it’s got a lot lower to go because what that person just said in saying that is that this person has a dozen logical reasons why gold ought to be going higher but its going lower and THAT doesn’t make sense. But the world always makes sense. What doesn’t make sense is his model. And this applies in life. In June, about a year ago, Donald Trump announced his candidacy and his first thing was “we’re putting up a wall and they’re paying for it.” And his numbers shot up in the polls and people came saying to me and pundits on TV kept saying, “that doesn’t make any sense” and I thought, “oh my god. wait, but that’s precisely it!” It means it’s going higher. If a stock goes up and there’s no rational reason, that means there’s some “X factor” that you haven’t considered. It makes TOTAL sense now in retrospect, but back then it didn’t. I was  talking to Sam Zell, a great real estate investor, and all he does is read the newspaper and all he’s looking for are things that don’t make sense. So I asked him to give me an example. He says, “OK. I’m reading the newspaper and I’m seeing a Starbucks that just opened up (this is 15 or 20 years ago) in Mongolia. But Mongolia? They drink tea. What’s with that?” He’s so curious about this because it makes no sense, that he takes his private jet, flies to Mongolia, and he discovers that they started mining. This was the beginning of the big China infrastructure build, and the only reason he knew about it was because it didn’t make any sense.

So I’m telling you, that’s the key thing. People stumble upon these ideas and dismiss them because they say, “ehhh it doesn’t make any sense” and I’m telling you that’s where the gold mine is. Things that don’t make sense.