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Small Circles: The Theory of Mastery in the Art of Learning and Investing

One of the best books on the art of learning I’ve read is, well, The Art of Learning by Josh Waitzkin.

Josh is a champion in two distinct sports – chess and martial arts. He is an eight-time US national chess champion, thirteen-time Tai Chi Chuan push hands national champion, and two-time Tai Chi Chuan push hands world champion.

In his book, Josh recounts his experiences and shares his insights and approaches on how you can learn and excel in your own life’s passion, using examples from his personal life. Through stories of martial arts wars and tense chess face-offs, Josh reveals the inner workings of his everyday methods, cultivating the most powerful techniques in any field, and mastering the psychology of peak performance.

One of my favourite chapters from Josh’s book is titled – Making Smaller Circles – which stresses on the fact that it’s rarely a mysterious technique that drives us to the top, but rather a profound mastery of what may well be a basic skillset.

Josh starts this chapter with the story of the protagonist in Robert Pirsig’s book Zen and the Art of Motorcycle Maintenance. This man is Phaedrus, a teacher, who in this particular scene is reaching out to his student who is all jammed up when given the assignment to write a five-hundred-word story about her town, Bozeman.

Here is that scene straight from Pirsig’s book –

…a girl with strong-lensed glasses, wanted to write a five-hundred-word essay about the United States. He … suggested without disparagement that she narrow it down to just Bozeman.

When the paper came due she didn’t have it and was quite upset. She had tried and tried but she just couldn’t think of anything to say. He had already discussed her with her previous instructors and they’d confirmed his impressions of her. She was very serious, disciplined and hardworking, but extremely dull. Not a spark of creativity in her anywhere. Her eyes, behind the thick-lensed glasses, were the eyes of a drudge. She wasn’t bluffing him, she really couldn’t think of anything to say, and was upset by her inability to do as she was told.

It just stumped him. Now he couldn’t think of anything to say. A silence occurred, and then a peculiar answer: “Narrow it down to the main street of Bozeman.” It was a stroke of insight.

She nodded dutifully and went out. But just before her next class she came back in real distress, tears this time, distress that had obviously been there for a long time. She still couldn’t think of anything to say, and couldn’t understand why, if she couldn’t think of anything about all of Bozeman, she should be able to think of something about just one street.

He was furious. “You’re not looking!” he said. A memory came back of his own dismissal from the University for having too much to say. For every fact there is an infinity of hypotheses. The more you look the more you see. She really wasn’t looking and yet somehow didn’t understand this.

He told her angrily, “Narrow it down to the front of one building on the main street of Bozeman. The Opera House. Start with the upper left-hand brick.”

Her eyes, behind the thick-lensed glasses, opened wide.

She came in the next class with a puzzled look and handed him a five-thousand-word essay on the front of the Opera House on the main street of Bozeman, Montana.

“I sat in the hamburger stand across the street,” she said, “and started writing about the first brick, and the second brick, and then by the third brick it all started to come and I couldn’t stop. They thought I was crazy, and they kept kidding me, but here it all is. I don’t understand it.”

The key lesson from this scene, as Josh writes in his book, is that depth scores over breadth when it comes to learning anything. As he writes (emphasis is mine) –

The learning principle is to plunge into the detailed mystery of the micro in order to understand what makes the macro tick. Our obstacle is that we live in an attention-deficit culture. We are bombarded with more and more information on television, radio, cell phones, video games, the Internet. The constant supply of stimulus has the potential to turn us into addicts, always hungering for something new and prefabricated to keep us entertained. When nothing exciting is going on, we might get bored, distracted, separated from the moment. So we look for new entertainment, surf channels, flip through magazines.

If caught in these rhythms, we are like tiny current-bound surface fish, floating along a two-dimensional world without any sense for the gorgeous abyss below.

When these societally induced tendencies translate into the learning process, they have devastating effect.

Josh’s idea of making smaller circles is a great way to decide how to live, what to read, and how to invest sensibly.

Making Smaller Circles – Reading
Take reading for instance. With so much literature around, and so much getting published day after day, it often gets challenging for most of us to decide on what to read. The breadth of what is to be read is huge, and is just getting bigger by the day.

Given this, as Josh writes, we have become like the “tiny current-bound surface fish, floating along a two-dimensional world without any sense for the gorgeous abyss below.”

The way out of this is to differentiate between reading that is enduring (durable – learning that has lasted a lifetime) and one that is ephemeral (fleeting – mostly information), like I’ve done in this chart below…

[Click here to open a larger image]

…and then focus on stuff that is enduring. That’s choosing depth over breadth. That’s making smaller circles. And that’s exactly what I have been doing since the start of 2017 i.e., focusing 90% of my reading time on re-reading the super-texts (depth) and only 10% on others (breadth).

Here, I also take lessons from Seneca, a Roman Stoic philosopher who lived during 4 BC – AD 65. During the last two years of his life, Seneca spent his time in travelling, composing essays on natural history and in correspondence with his friend Lucilius. In these letters, 124 of which are available, he covered a wide variety of topics, including true and false friendship, sharing knowledge, old age, retirement, and death.

Coming to the topic of this post, here is what Seneca wrote in his second letter to Lucilius – On Discursiveness in Reading – which I am posting as it is here, and which contains the answer to the dilemma most of us face on what to read as investors (by the way, ‘discursiveness’ means moving from topic to topic without order) –

The primary indication, to my thinking, of a well-ordered mind is a man’s ability to remain in one place and linger in his own company.

Be careful, however, lest this reading of many authors and books of every sort may tend to make you discursive and unsteady. You must linger among a limited number of master thinkers, and digest their works, if you would derive ideas which shall win firm hold in your mind. Everywhere means nowhere.

When a person spends all his time in foreign travel, he ends by having many acquaintances, but no friends. And the same thing must hold true of men who seek intimate acquaintance with no single author, but visit them all in a hasty and hurried manner.

Food does no good and is not assimilated into the body if it leaves the stomach as soon as it is eaten; nothing hinders a cure so much as frequent change of medicine; no wound will heal when one salve is tried after another; a plant which is often moved can never grow strong. There is nothing so efficacious that it can be helpful while it is being shifted about. And in reading of many books is distraction.

Accordingly, since you cannot read all the books which you may possess, it is enough to possess only as many books as you can read.

“But,” you reply, “I wish to dip first into one book and then into another.” I tell you that it is the sign of an overnice appetite to toy with many dishes; for when they are manifold and varied, they cloy but do not nourish. So you should always read standard authors; and when you crave a change, fall back upon those whom you read before. Each day acquire something that will fortify you against poverty, against death, indeed against other misfortunes as well; and after you have run over many thoughts, select one to be thoroughly digested that day.

This is my own custom; from the many things which I have read, I claim some one part for myself.

Now, as I was reading Seneca’s letter, I was reminded of what Sherlock Holmes told his accomplice Watson in A Study in Scarlet

I consider that a man’s brain originally is like a little empty attic, and you have to stock it with such furniture as you choose. A fool takes in all the lumber of every sort that he comes across, so that the knowledge which might be useful to him gets crowded out, or at best is jumbled up with a lot of other things so that he has a difficulty in laying his hands upon it.

Holmes added…

Now the skillful workman is very careful indeed as to what he takes into his brain-attic. he will have nothing but the tools which may help him in doing his work, but of these he has a large assortment, and all in the most perfect order. It is a mistake to think that that little room has elastic walls and can distend to any extent. Depend upon it there comes a time when for every addition of knowledge you forget something that you knew before. It is of the highest importance, therefore, not to have useless facts elbowing out the useful ones.

As years have passed, I have turned from trying my hands at speed reading – acting like Holmes’ fool who takes in all the lumber of every sort that he comes across – to slow, thoughtful reading and re-reading.

I do not read more than 1-2 books a month now, and that I find is a gradual enough pace that helps me assimilate the ideas I read in a better manner. As a wise man said, slow reading is not so much about unleashing the reader’s creativity, as uncovering the author’s.

Often it’s the same old books – the super texts – that I refer to again and again…for each time I go through them, I get a few new and brilliant insights that missed my eyes in the previous readings.

Making Smaller Circles – Investing
To reiterate, the concept of making smaller circles, as outlined in Josh’s book, stresses on the fact that it’s rarely a mysterious technique that drives us to the top, but rather a profound mastery of what may well be a basic skillset.

When it comes to investing, this concept applies in the way that you must do just a few small things right to create wealth for yourself over the long run. Pat Dorsey, in his wonderful book – The Five Rules for Successful Stock Investing – summarizes these few things into, well, just five rules –

  1. Do your homework – engage in the fundamental bottom-up analysis that has been the hallmark of most successful investors, but that has been less profitable the last few risk-on-risk-off-years.
  2. Find economic moats – unravel the sustainable competitive advantages that hinder competitors to catch up and force a reversal to the mean of the wonderful business.
  3. Have a margin of safety – to have the discipline to only buy the great company if its stock sells for less than its estimated worth.
  4. Hold for the long haul – minimize trading costs and taxes and instead have the money to compound over time. And yet…
  5. Know when to sell – if you have made a mistake in the estimation of value (and there is no margin of safety), if fundamentals deteriorate so that value is less than you estimated (no margin of safety), the stock rises above its intrinsic value (no margin of safety) or you have found a stock with a larger margin of safety.

If you can put all your efforts into mastering just these five rules, you don’t need to do anything fancy to get successful in your stock market investing. Of course, even as these rules sound simple, they require tremendous hard work and dedication. As Warren Buffett says – “Investing is simple but not easy.” And then, as Charlie Munger says, “Take a simple idea but take it seriously.”

You just need a simple idea. You just need to draw a few small circles. And then you put all your focus and energies there. That’s all you need to succeed in your pursuit of becoming a good learner, and a good investor.

I believe that the process of working on the basics (the small circles) of learning or investing over and over again leads to a very clear understanding of them. We eventually integrate the principles into our subconscious mind. And this helps us to draw on them naturally and quickly without conscious thoughts getting in the way. This deeply ingrained knowledge base can serve as a meaningful springboard for more advanced learning and action in these respective fields.

Josh writes in his book –

Depth beats breadth any day of the week, because it opens a channel for the intangible, unconscious, creative components of our hidden potential.

The most sophisticated techniques tend to have their foundation in the simplest of principles, like we saw in cases of reading and investing above. The key is to make smaller circles.

Start with the widest circle, then edit, edit, edit ruthlessly, until you have its essence.

I have seen the benefits of practicing this philosophy in my learning and investing endeavors. I’m sure you will realize the benefits too, only if you try it out.

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About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.


  1. Engaging in the fundamental bottom-up analysis is a powerful suggestion, Vishal. Often we want to focus on only the glamorous aspects of an activity and jump to the next, considering ourselves quasi-polymaths. But the lack of depth in our knowledge becomes evident when we have to walk the talk.

    Loved the letter of Seneca, especially the part about lingering on work of select master thinkers and digesting their works.

  2. I am seriously curious as to how to reconcile the thesis put forward here with developing the lattice work of mental models as suggested by the venerable Charlie Munger.

    This is akin to focussing on your circle like a laser beam cutting thru carbon steel while developing the lattice work of mental models is comparable to having a vision like Yudhisthir (he replied to Dronacharya that he could see the whole world while Arjuna–equivalent of modern day Josh Watzkin–pointed only to the bird’s eye). The problem for me is that–as Mahabharata has shown–both of their qualities happen to be essential for the consummate whole that is life whether you ought to run a kingdom or succeed as an investor.

    I can’t overemphasize one at the expense of the other for I need both even if it were to mean that the twain shall meet however impossible it may seem to start with.

    Enjoyed the article to the fullest. Thanks for posting it. All kudos to you.

  3. Hi Vishal,

    This is a great post about investing. You also shared an interesting author to follow. Do you have any other books that or group that you can share with especially for aspiring investors?

  4. As ever, I enjoyed reading your recent offering on focused reading (Small Circles). Excellent! I may not have commented on most of your earlier ones but each of them is a gem. Keep it going.

  5. Hi Vishal, Great post. Enjoyed the idea of small circles and the five rules for successful investing. Great read. Thanks for sharing.

  6. Mastram says:

    To be a successful investor, you need to be born to a billionaire. Everything else like small circles, Big circles, medium circles etc. is speculation only.

  7. ankur bhatia says:

    Thanks Vishal this post has helped me to find answers to question of information overload and greed of knowledge


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