Thoughtful Disagreement

Last week, Peter Wallison got me thinking about narrative and, as so often happens, the idea is now turning up everywhere.

Today, Jason Zweig wrote about two of the world’s most successful investors challenging their own narratives in his Wall Street Journal column.

Would the Democratic and Republican parties — and especially their followers — do well to consider challenging their own narratives?

According to Zweig, “There was no big news at Berkshire Hathaway’s annual meeting this past weekend, but there was one great lesson for investors: Perhaps the most important thing you can do when everything seems to be going right in your portfolio is to listen to somebody who insists you are wrong.”

Zweig suggested we ask ourselves “When is the last time the management of a major U.S. company sought out unrestricted criticism from someone betting against the stock?”

“Another vehement believer in the importance of challenging your own investing ideas is Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge-fund manager, which oversees more than $150 billion.”

“When two intelligent parties disagree, that’s when the potential for learning and moving ahead begins,” Mr. Dalio told me last week. “The most powerful thing that [an investor] can do to be effective is to find people you respect who have opposite, different points of view [from yours]—and have an open-minded exchange with them about what’s true and what to do about it.”

Now let’s change Zweig’s question slightly: “When is the last time either party sought out unrestricted criticism from someone opposing its position?” Or “When was the last time either party sought advice on whether its policy would actually work rather than just providing a win?”

Seeking contrary views is not just for successful investors. According to Buffet, “whenever [Charles Darwin] ran into something that contradicted a conclusion he cherished, he was obliged to write the new finding down within 30 minutes. Otherwise his mind would work to reject the discordant information, much as the body rejects transplants. Man’s natural inclination is to cling to his beliefs, particularly if they are reinforced by recent experience.”

Testing party orthodoxy would be an interesting plan if solving problems were the goal, but perhaps it isn’t.

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Haven Pell

At the conclusion of the Constitutional Convention of 1787, a woman asked Benjamin Franklin, “Well, Doctor, what have we got, a republic or a monarchy?” Without hesitation, Franklin replied, “A republic, if you can keep it.”

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