How Einstein solved difficult problems? He used thought experiments. It’s a tool that uses impossible situations, creates hypnotical scenarios, and tries to think and find solutions. A lot of great thinkers use this method. The purpose of thought experiments is to think wild, push us outside our comfort zone and force us to think about answers which we usually try to avoid.
Let’s use “Thought Experiments” on investing and personal finance.
First thought experiment
Let’s say you become a large equity fund manager but with a twist. You have to do the opposite of what a fund manager’s job is. You have to purposely underperform the benchmark (Nifty 100). i.e. fail on purpose. Do you think you can do this?
Initially, you might think it’s easy. It’s like failing an exam. But as you start building a portfolio of forty to fifty worst stocks. You realize that the job is not as simple as it seems.
The stocks which you pick may turn out…