Knowledge is Power – Or is it Really?


08 Feb Knowledge is Power – Or is it Really?

The following message has been making its rounds on my WhatsApp chat groups recently.

Traffic Police Means Business!

Traffic Police Means Business!


The message is clear. Drivers beware, the traffic police has fitted out unmarked cars and vans with HD cameras. The cars will be roaming the streets to try and capture drivers and occupants who are not properly belted up. They will also be on the look out for drivers using mobile phones while driving.

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On top of providing the make, model and colour of the vehicles, the message goes on to provide details about the vehicle registration number. It leaves you in no doubt that the Traffic Police means business. I am thankful to them for keeping our roads safe.

I have received quite a few similar versions of this message. They have come from friends, colleagues and gasp, even my mother! They are well intentioned and I am grateful.

However, as appreciative as I can be about the information passed on, there is this nagging doubt about how I could put this information to good use.

How can I use the information? 

Imagine for a moment if I am someone dead bent on beating the cops at their own game. With this amount of information at hand, I can possibly use it to work in my favour in a few ways.

1. Knowing exactly what the vehicle numbers are, I could quickly buckle up as I draw behind the vans.

Or if I only realise too late that the van in front is actually Surveillance Central, I could pretend that my mobile phone is a chocolate bar and swallow it. The camera would have captured that feat and people reviewing the video would be left in no doubt that I am not on my phone but merely talking to a kit kat bar.

But you see, this strategy would require me to memorise and constantly scan my surroundings for all the numbers. Virtually impossible.

2. I could also keep a constant lookout for the vehicles in question. Now let’s see, there is a white Nissan van, a dark blue Toyota, a black Nissan and also a silver Toyota Altis.

I tried doing that along ECP from Fort Road back to Marine Parade. I scanned front and back, side to side. Every time a new vehicle came into my peripheral vision, I would manually process the make and colour. It was mentally taxing and not very practical.

Which lead me to conclude that as useful as the information about the vehicles and their number plate numbers are, they are of practically of zero use to me.

Knowledge is power. 

Since young I have been reminded over again and again. Knowledge is Power. Knowledge is Power. Study to gain more knowledge. When I started work, my seniors taught me – Knowledge is Power. If your knowledge about work is good, people will respect you and leave you alone to your own devices.

I have never doubted the adage. It was after all, a highly logical assumption. It is only many years of diddling in DIY trading and investing that I have come to realise that the proverbial ‘knowledge is power’ might not be true in all instances. Here are two occasions where I believe otherwise.

Information Overload. 

Ever since young, I have always been a news junkie. I love to read about the global financial markets. Global interest rates, foreign exchange rates, bond yields. They fascinate me. Breaking news is even more exciting.

I used to enjoy soaking up all the information presented by the papers and news agencies and in more recent times, social media sources such as my twitter feed. It feels good being part of the financial markets. It feels good participating.

More importantly, it feels good gaining knowledge. I told myself that eventually I will be using these knowledge to make better trading and investing decisions. They will be useful to me. I kept it up for a good many years. It was only recently in a moment of epiphany that I realised the amount of time I have invested into gaining this ‘knowledge’ amounts to almost nothing on the investment front.

Do not get me wrong, I do keep abreast of the financial news and the going ons around the world. But I now apply a generous dosage of filter on this form of ‘knowledge’. There is no way we can keep up with the news. There will always be something happening in some parts of the world that is deserving of a CNN or CNA breaking news headline.

Gaining more ‘knowledge’ in this form is hardly power. It is clutter.

Investment Strategy. 

Like all retail investors/traders, I am constantly in search of the ultimate strategy. My definition of the ultimate strategy is simple, and I believe many will share the similar sentiments. The ultimate strategy has got to be the one that makes the most returns while being exposed to the least amount of risk. Simple enough.

I butterflied from one form to another. I have tried my hands at stocks, forex trading, and have picked up options. I tried to accumulate as much knowledge about these instruments as I could. Yet in my single minded pursuit of returns I have overlooked an extremely crucial point.

Many of these strategies, while they work perfectly well, they are not a good fit for me. Some of them require constant monitoring, which takes me away from time with family and friends. Others are extremely rule based, they stifle my creativity and make me feel like a robot. Yet other strategies require me to wait and do nothing for entire periods of time, something very difficult for an impatient person like me.

I have acquired good knowledge about these trading strategies, but as you can see, I am unable to apply them successfully for one reason or another. Without successful application, I cannot unleash the true power of these sets of knowledge. Rather then knowledge being powerful, knowledge is now powerless.

Knowledge is not Power. Applicable Knowledge is Power. 

With that, I hope to have convinced you that Knowledge is not Power.

In fact, only Applicable Knowledge is power. Knowledge that you cannot apply serves no purpose at all. It bogs you down. You might be better off discarding it and using the capacity or the time required to maintain it to gain new, more applicable, knowledge.

Choose wisely the knowledge you want to pick up and you will be a force to be reckoned with. Otherwise you are no better off from memorising the number plates of unmarked police cars to try and avoid them – somewhat foolish.

Drive safe, and invest safe, everyone!

image: mtdsalestraining


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  • RetailTrader
    Posted at 12:15h, 14 February Reply

    Great post and agree 100%. This gels with what Nicolas Taleb has to say about useless information and the need to triage information in this age of information overload. I hope you can come across a trading system that can suit your personality.

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