Decision Making

We’re going back to the wonderful well of Weekly Thoughts from Chenmark this week. They have just started a multi-week series on managing uncertainty that is fantastic. Part one is particularly good in its discussion of decision making when it comes to investing.

It’s easy (and perhaps wise) to argue that collecting is not investing, but I’d like to flip that on its head and say that, in some way, everything in life is investing. The reason I’d make this argument is that everything we do – from jumping out of bed first thing in the morning vs lazing the morning away with a snooze, to choosing an index fund over a rental property for our portfolio, to going with conventional vs grass-fed beef at the grocery – involves a choice. A decision with real consequences. Making these decisions involves risk.

From the Chenmark Newsletter: …the world is an inherently complex and uncertain place, and attempting to fully eliminate risk or to drive for “certainty” is unrealistic. Instead, we must do our best to understand the full range of potential outcomes and use that information to think probabilistically about expected value. We must try to understand what happens if we are right, what happens if we are wrong, and the probabilities associated with those outcomes.

Chenmark: Managing Probability

Sounds a lot like collecting. What if this part isn’t authentic? What if this rug is a really good fake? This price seems to good to be true – how can I be certain I’m not getting scammed?

The piece goes on to describe the mathematics of a bet that looks so good on paper, you’d be crazy not to take it. The problem we have as humans is that real-life outcomes don’t happen like models. I think we sense that, inherently, and it’s one of the reasons we become stymied when facing what feel like big decisions. When we feel like we can’t be wrong, we can’t move forward.

As life works out, another piece on just this thing came across our eardrums this week in the form of Shane Parish’s excellent podcast, The Knowledge Project. Episode 119 features Susquehanna International Group Associate Director Todd Simkin talking about this same subject – specifically, how we fool ourselves in thinking we made good decisions when we have good outcomes and bad decisions when we have bad outcomes.

How does this all relate to collecting? One of the things we’ve said in our books and in articles here is that to be a collector, you have to start collecting. One reason we don’t start – collecting or anything – is that we are afraid of making a mistake. If we take these ideas from Chenmark and Simkin to heart, and we start to think about our decision-making process when we evaluate our choices (in this case, to purchase something for our collection or not), we’ll ultimately end up with more valuable, and far more satisfying, collections.

Have a great week!




More Posts

Sourcing, Servicing and Selling Your Car with Speciale Auto Concierge!

The guys in The Corner talk to Keith Williams from Special Auto Concierge, a unique company with two extreme passions – taking care of their customers and a love of automobiles. At SAC, the automobile goes far beyond basic transportation. They are part of history, one of the highest expressions of art. Listen in on the conversation as Jason and Eric discover what makes this company “speciale” when it comes to buying or selling a classic car.

Financing the Exotic Car with Steven Posner of Putnam Leasing!

Can you lease a classic car? The short answer is “yes!!” Join the guys in The Corner today, talking to Steven Posner of Putnam Leasing. Since 1983, Putnam Leasing has been designing leases for drivers who ultimately want to own their cars. As a result, there are many term, residual and payment options available. Putnam leases are unique to the lessee – it’s uncommon for two leases to be structured alike. Each and every lease is designed for that particular client’s needs. With leases up to $1M, Putnam may be the answer to “how can I finance my next classic?” Listen in and find out!

Shirley’s Way with Mike Mulrooney & Shawn Murphy

Shirley’s Way is known for a variety of events, and the one we here at CCC admit we love the most is the Grease Knuckle’s Car & Bike Show, which will take place on May 14, 2022! Listen in and learn more about the show, the foundation and an all-around good time for a great cause.

Extraordinary Race Cars Built in the USA – Devin Sports Cars with Kevin Callahan!

Today Jason sits down with Kevin Callahan from Devin Sports Cars for a wild ride! Listen in and hear why founder Bill Devin of Devin Enterprises was once called “The Enzo Ferrari” of the Okie Flats. Bill has been  described as a conjurer, an enthusiast and “Crazy like a fox,” and Kevin  will tell us why! Bill’s spirit lives on in today’s Devin, limited  edition, small production cars for the racing enthusiast. Join us to  learn how Devin combined American and European styling, the evolution of  the first Devin cars into today’s model, the special qualities that  make a Devin and – most importantly – can you buy one?!?!

Xtreme Xperience with Adam Olalde!

Ever wanted to drive a supercar on a racetrack? This week’s guest is the guy to make it happen! Jason talks with Adam Olalde, President and CEO of Extreme Experience. This company believes the world’s most exciting cars should be accessible to you. They deliver world-class driving experiences at more than 40 epic driving destinations nationwide, allowing every day people to explore America’s best backroads from the driver’s seat of an exotic car or experience the adrenaline rush of racing a supercar on a racetrack with no speed limits.

The 1941 Chevrolet Pick Up Truck with Bridgette and James Morris

This is a fun one! The guys visit with Bridgette and James Morris and do a deep dive into their 1941 classic Chevrolet pick up truck. This is the stuff our show is made of – real people with cool cars, getting into the nitty gritty of their rides. This iconic truck is a marvel for the eyes and Bridget and James’ stories will capture your heart! Listen in and find out why people fall in love with cars!