Max Planck was born in Germany in the 1850s.
Planck became interested in thermodynamics and radiation at a relatively young age and received his doctorate at the age of 21. His work was crucial to the field of physics and the field known as quantum theory. Planck’s constant became the basis of quantum mechanics.
This work earned Planck the Nobel Prize in Physics in 1918.
Charlie Munger mentioned Planck in a 2003 speech to economics departments at the University of California, Santa Barbara.
The speech was published at: Poor Charlie’s Almanac.1 Munger tells a story about Planck to draw attention to different types of intelligence:
After winning his prize he was invited everywhere to lecture and had a driver who took him around to give public lectures all over Germany. The driver memorized the lesson and one day he said, “Wow, Professor Planck, why don’t you let me try it by switching places?”
And so he went up and taught. Finally, a physicist stood up and asked an extremely difficult question. But the driver was ready for this.
“Well,” he said, “I’m surprised that a citizen of a developed city like Munich would ask such a simple question, so I’ll ask my driver to answer.”
Planck is one of the smartest people ever. He actually tried economics as a discipline but then gave up. From where?
He admitted: “It’s very difficult. The best solution you can find is complex and uncertain.” There wasn’t enough order for him.
The story about the driver is probably apocryphal, but the message is more important than ever these days.
Knowledge is a commodity in the world of AI and LLMs. Answers are available everywhere.
You can outsource your knowledge. You can outsource your writing. You can outsource tasks at work. You can outsource your email responses. Artificial intelligence will allow you to outsource your thoughts if you so choose.
But you can’t outsource your understanding.
I’ve been thinking a lot about the intersection of AI and the asset management space. I travel around giving talks on the subject to financial advisors and asset managers. Many people are concerned about the impact of artificial intelligence on the consulting industry.
The advisor AI tools I’ve seen are amazing. Artificial intelligence will definitely make life easier for advisors who know how to use it correctly.
But the biggest change going forward will be a more informed customer. You can ask an LLM as many questions as you want and he will never tire of them. Will all responses be of high quality? Not absolutely necessary, but good enough in most cases.
Knowledge and surface-level answers are on the table. Consumers can look at anything. They may stress test your answers and financial planning techniques. They can upload portfolio statements and assets for instant analysis and feedback.
Therefore, context, perspective and communication skills will be more important than ever going forward in all fields.
Of course, you can give some answers from the AI, but can you explain it in plain English? Can you make this more personal? Can you step back when necessary?
Are you knowledgeable enough to have an idea where the answers make sense and where they don’t?
Now more than ever, qualitative skills represent the future.
The ability to show empathy, be creative, and have truly informed conversations with people is how you differentiate yourself from those who merely benefit from chauffeur knowledge.
In a world where everyone has access, shortcuts are useless.
Further Reading:
Stories and Stats
1My dad gave me an early copy of this book for Christmas when I first got into the industry. My friend Jeremy Schwartz was then able to get Munger to sign a copy for me. Easily one of my favorite books and something I re-read from time to time.
This content containing security-related opinions and/or information is for informational purposes only and should in no way be relied upon as professional advice or endorsement of any practice, product or service. No guarantee or warranty can be given that the views expressed herein will apply to any particular case or circumstance and should not be relied upon in any way. You should consult your own advisors on legal, business, tax and other related matters regarding any investment.
The comments contained in this “post” (including any associated blogs, podcasts, videos, and social media) reflect the personal opinions, perspectives, and analyzes of Ritholtz Wealth Management employees making such comments and should not be considered the opinions of Ritholtz Wealth Management LLC. or its respective affiliates or a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.
References to any security or digital asset or performance data are for illustrative purposes only and do not constitute investment advice or an offer to provide investment advisory services. The tables and graphs contained therein are for informational purposes only and should not be taken into account when making any investment decisions. Past performance is not indicative of future results. The content speaks only from the date specified. Any projections, estimates, estimates, targets, expectations and/or opinions expressed in these materials are subject to change without notice and may differ from or contradict views expressed by others.
The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives compensation from various organizations for advertising on affiliate podcasts, blogs and emails. The inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or Ritholtz Wealth Management or any of their employees. Investments in securities involve the risk of loss. For additional advertising disclaimers, see here: https://www.ritholtzwealth.com/advertising-disclaimers
Please see the descriptions Here.
