Peter Thiel once said: “As an investor, you want to find things that are so stupid that other investors are embarrassed to invest in them.”
As an example, he cited the FAANG stocks (Facebook, Apple, Amazon, Netflix, and Google). Jim Cramer coined the acronym in 2014. If you’d followed his advice, you would have made ~8x your money in six years. But many investors pursued other strategies because investing in FAANG stocks seemed too stupid.
Such simplicity would have suggested that the investor isn’t doing enough work.
After all, smart people do complicated things!
Investing isn’t the only field where people avoid simplicity. Smart people love to over-complicate things so they can feel like they’re working hard. And if they fail, at least they can say to themselves: “I tried something tough, and it just didn’t work.”
But the world rewards you for outcomes, not effort. When you insist on working hard, even when it’s not the most effective strategy, you miss obvious solutions that are right in front of your eyes.
Whenever you’re trying to solve a problem, ask yourself: “What answer am I missing because it seems too stupid?”