Deja vu hit me. I had just trimmed my Square position, then it went on a massive run. I had done this before and regretted it. Yet, that didn’t stop me from repeating the same mistake over and over again. I never stopped to look back and think whether I could use my past actions as a guide for the situation I repeated today until I stumbled upon the mental model of deconstructing common root structures.
Deconstructing Common Root Structures
I first learned about deconstructing common root structures while listening to a podcast with Josh Waitzkin. I’ve always been fascinated by Josh and his ability to dominate whichever field he enters, from chess to jiu-jitsu.
Deconstructing common root structures is looking for commonalities, then taking them apart to understand how they apply to different circumstances. A great example comes in the form of a story of a tai-chi expert who has been studying for years:
When the story is laid out clearly, it is easy to deconstruct the common root structure. This student thought they understood and that their past self was wrong, but soon enough, this student would become the past self. Deconstructing common root structures is looking for these situations where we are consistently wrong, but don’t see it until we look for it. Many times, you just need to have it laid out to recognize.
“It’s very different to actually be able to see our mental models, our frames, so people are usually looking at the world through their frames. We can also cultivate the ability to look through the frame but also see the frame.”Josh Waitzkin
If you can zoom out and see the frame you are looking through, identifying these mistakes becomes so much clearer.
Systems for Deconstruction
Deconstructing common root structures sounds simple. Essentially it’s “ok, dummy, just don’t make the same mistake again.” Yet, when I look back on my history objectively, I see a lot of the same mistakes. Then I look back at others’ histories and I see the same thing. It’s obvious, but often the opportunity lies in the obvious.
When I first came to the realization I needed to better deconstruct, I ran into a problem. I didn’t have the data. I had my memory, but that is questionable at best. That is part of the reason for this blog. I can go back in the future and understand why I am making the decisions I am. For every buy or sell, I write a blog on why I am doing that. Then in the future, when it becomes clear I am making poor sell decisions, I don’t need to rely on my memory. I can rely on my words at that time. It’s almost like time traveling back in time to interrogate yourself. I get blogs aren’t for everyone, but you can keep a trade journal or even just a personal journal. The key is to give yourself some sort of better dataset than your memory. You can’t deconstruct if you don’t quite know how it was constructed.
Problems Are Everywhere
The key is to stop and then deconstruct common root structures in all areas. Identify the mistakes you made, then find the commonalities. Don’t stop just at mistakes either. Apply this to your victories as well. Study why you are right. Are you right on purpose or by accident? It’s important to know the difference.
Here are some examples of areas you could review for common root structures:
- Create an investment log, then analyze buys/sells for common problems
- Pull together historical fantasy football drafts/trades and identify commonalities in your mistakes
- Review mistakes you made in past areas of study
- Study great companies and find the commonalities around their rise
You can find commonalities everywhere. Don’t be afraid to get creative and think laterally.
Then the key is to deconstruct. Take the mistakes apart until you can find them down to their lowest form. Maybe all of your worst sales in investing were all in times of chaos (dot com bubble, the great recession, COVID, etc…). Once you have deconstructed the situation to its component parts, you can start to identify fixes. If you find yourself uncomfortable in times of chaos, find a way to (safely) put yourself into areas of chaos to train yourself to handle it.
Eventually, the goal is to learn to deconstruct common root structures from your mistakes and from the world around you. Once you begin this practice, you might start to see commonalities across disciplines that others don’t (i.e blogging and investing or fantasy football and jiu-jitsu). We will never stop making mistakes, but that doesn’t mean you can’t learn from others as well.