4.3 Long-term Education and the Mirror Effect
Education is like a pair of glasses. You are in the same world before and after putting on the glasses, but you can see more clearly and accurately after putting on the glasses. You are in the same world before or after you learn something, but you can see the world more clearly and accurately through the lens of education.
The world in the mirror and the world outside of the mirror look the same, but they are actually reversed.
Not only do they make the wrong choice, they make it while brimming with confidence! This is another surprising example of the Mirror Effect in education.
The mirror in this case is an understanding of the long term. It is this mirror that brings about so many surprising examples of the Mirror Effect.
Almost all of the surprising Mirror Effects are due to different understandings of the long term. It's an eternal fact that most people have no concept of the long term and only see that which is right in front of them. To put it another way, for the vast majority of "chariots", the black horse is always the strongest, the white horse always follows the black horse, and driver never grows at all.
From a long-term perspective, the market tends to be relatively efficient, and the longer the term the more efficient it will be.
But at any one point in time the market is extremely inefficient.
Fortunately, because we are always wearing "long-term" sunglasses, we just have to use our time to wait for the market to show its long-term efficiency.
Once you have done all you can to develop your concept of the long term, you will discover how different and simple macro observations are, and you will be surprised to discover this fact:
The more important the problem the easier it is to solve, and the hardest problems are the easiest to solve. But people waste all of their wisdom trying to solve complicated yet unimportant problems.
We either focus fully on the present, or we focus fully on the future. Anyway, those are the two worlds inside and outside of the mirror, and they are always the opposite of each other. Of course, Siegal's research tells us that, as far as making money goes, focusing only on the future is a better deal.
This is the value and necessity of investment education. Your driver must mature, and your black and white horses must be trained. In the end, they will bring you into a mirror world in which everything will look the same but actually be the opposite of what you once saw. In fact, though, the world inside the mirror is the actual nature of the objective world. This is the secret of investment: have a 100% objective understanding of the objective world, and a 100% objective understanding of oneself. It's really very difficult. It's only difficult, though, from the perspective of the present, and it's certainly not impossible. Looked at from a long-term perspective, it shouldn't be difficult at all.
