It is useful to think about the world in terms of a four-quadrant matrix where the horizontal dimension comprises what is knowable and unknowable and the vertical dimension comprises what is important and unimportant.
It should be obvious that you should not spend any time on what is unknowable and unimportant.
The trick is steering clear of the Unknowable/Important box and the Knowable/Unimportant box.
The Unknowable/Important box is very tempting. Lots of people pretend to have something worthwhile to say about things that fall into this quadrant. This is where most macro forecasts live and discussions about timing and short-term price movements. Promoters like to set-up shop here. This is the domain of unfounded opinions where the prognosticator’s incentives almost never align with your interests.
The Knowable/Unimportant box is also tempting. An example is useful here. Buffett pointed out that it was knowable quite early on that automobiles and airplanes were destined to rise and become a central part of modern life. These insights were not particularly useful to investors because a) it was impossible to handicap the eventual winners in those emerging industries and b) even if you could, they were unattractive investments given their reliance on massive low-return capital investments.
The trick is to focus on what is important and knowable. For example, it is very important to try to understand where a prospective business investment will be in ten years, even if it cannot be done with precision. It’s equally important to limit the time you invest thinking about investments to those businesses where this is actually possible. You can’t do this very often, but this is what you should be looking for.
Focus on spending your day in this quadrant. This is where meaningful decisions are made. This is where you can gain an edge over those who are unwittingly wasting time on the unknowable and the unimportant.
The temptation to be drawn to these time wasters is real and strong. It is deeply grounded in human nature. The Internet only exacerbates this tendency.
Challenge yourself. Examine your day and resolve to improve where you’re spending your time and what questions you are asking.