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Knowledge vs Wisdom for Stock Traders Ep 198

Hey, this is Sasha and welcome to another episode of ‘Let’s Talk Stocks.’

Today, we’re going to take a look at knowledge versus wisdom, and this all stems from my new upcoming book ‘Mindsets of a Master Trader.’ Don’t worry. You have plenty of time to get it. It’s not even out yet. It’s something I’m working on. It should come out later towards the end of the year, but it’s all about the mindset of psychology, mentality, how to get your brain structured around trading.

Let’s get started

That’s what really what we’re going to hone in and focus on because I find a lot of people don’t understand the big difference between knowledge and wisdom, how they work together to attain it and grow it.

I want to share with you a quick little story here from my college days and really what the educational system is all about these days.

Most of the time — whether you’re in grade school, whether you’re in college — the way that things are set up is a lot of it is just memorization and regurgitation. You’re memorizing things, and you’re regurgitating. You’re memorizing it, and you’re spitting it out.

That’s what you do in college. You don’t attain wisdom. You get knowledge. This is what a lot of things happen in colleges. You acquire knowledge. You’re not gaining wisdom.

The big difference behind that is — yes, you may know how to do a procedure. You may know how to take a formula and apply it to a particular concept but there’s very few, I would say let’s throw a ballpark figure out there — 90% of it is going to be knowledge, and 10% might be wisdom that you attain.

The wisdom that you attain might be on how to live on your own. How to manage your finances, pay your bills, get a job — those kinds of things that might be the wisdom. But overall, the knowledge is indeed what happens in class. And it’s not as useful because again, memorization, regurgitation, and now I’d say 90% of the stuff I learned in college I don’t even use. I don’t also remember it.

The wisdom is what’s vital and important

When we look at stock trading, a lot of people know, but not a lot have wisdom. You need to work at both to become successful or even to have successful trades.

Even if you’re a lousy stock trader, you need some wisdom to be able to make something work.

I am looking at just knowledge.

This is just about burying your head. Let’s say books or courses, and learning about, let’s say technical analysis. That’s all fine. It’s okay to learn these things because you need that. You need this to be able to get to wisdom. So, you need all this initial stuff to get to wisdom, but how do you grow the wisdom part?

Well, the wisdom part comes from that experience. As you gain experience, as you learn how to manage your emotions, that’s where the wisdom comes in. It comes in from seeing those trades and knowing what to do.

You may know technical analysis or a pattern. You might know what a pattern looks like, but you don’t know what to do at the moment with those emotions or with the trade or how to position size.

You might have the theory. This is all theory, and this is all application. You have the theory, but now you got to apply it — this is where you build wisdom. I think of these things more like a glass container that’s slowly getting filled. You’ll slowly fill up the wisdom, and you’re slowly filling up the knowledge.

This is what’s going on — you’re slowly filling them up. You might need a little more knowledge at the beginning and then eventually that wisdom slowly starts to climb up. That’s what you’re doing — you’re always filling up a container that just constantly keeps growing on you to the top.

I think this is the critical key — you understand where are you personally as you’re looking to move forward in your journey with trading, investing, putting on trades, and shares.

Where are you?

Are you just honed in and focused on knowledge? I want to memorize this, learn this, get it quickly, but are you starting to apply that as well.

Because I have some traders that I’ve talked to and all they do is they get information. I’m all good for that. I think that’s a high starting point, but eventually, you have to move into the wisdom segment.

To do that, you have to get that experience. To get the experience, you have to put on trades. You have to put on some investment you have to see what happens at the moment. How do you personally deal with those situations because everybody is a little bit different in their risk levels, what they see that’s scary, what they see that’s comfortable for them.

Going from knowledge to wisdom, it’s a thing that you go back and forth. You might have a little more wisdom, and then you go back to the beginning and get a bit of knowledge, and it’s a pendulum, goes back and forth. You work it, and you continuously keep growing these little containers with more knowledge and more wisdom with time until the day you die. That’s really what the end goal of it is.

Final Word

If you’re looking to grow — that’s continuous growth. If you want to stop right there — that’s death, you’re dead. But if you want to continue to grow, continue to evolve, continue to grow, then work through your knowledge.

So, think about that. It’s not just memorizing, and regurgitation like you do in a lot of classes, it’s about really getting a deeper meaning and understanding. That’s what wisdom is all about.

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