The World Does Not Move in Chapters
An old book, a Sunday newspaper, and the discipline of joining the dots.
I was reading the Financial Times this weekend when I found myself thinking about a book I first read when it appeared in 2000: Robert Hagstrom’s Latticework: The New Investing.
Twenty-six years later, I have been reading it again. The newspaper supplied plenty of reasons why.
CalPERS is reducing its direct holdings in the largest technology companies. A potential combination of Tesla and SpaceX. Challengers competing with the established exchanges for ETF listings. Each raises questions about concentration, competition, and where power sits in financial markets.
Read together, they invite a larger question: how much of what we regard as permanent is simply familiar?
Hagstrom’s book explores an approach associated with Charlie Munger: building a latticework of mental models drawn from different disciplines. Finance belongs within a wider understanding of how the world works. Psychology, biology, mathematics, and philosophy all have something to contribute.
That idea struck me when I first read it. Today, it feels particularly demanding.
Because the world does not move in chapters.
The connections are where the consequences live.
Consider artificial intelligence.
We can examine computing capacity, software revenues, and productivity forecasts. We should. But follow the subject a little further and we reach electricity, water, planning permission, semiconductor supply chains, national security, and the cost of capital.
Then we reach people.
Who keeps their job?
Who acquires a new skill?
Who captures the savings?
Do customers benefit through lower prices, or shareholders through higher margins?
An advance in productivity can create extraordinary wealth while unsettling the communities in which it happens. Political responses can then change taxes, trade, and regulation, and alter the investment case we started with.
The spreadsheet still matters. Its assumptions need to survive contact with that wider world.
Energy presents the same challenge. A sustained rise in oil prices passes through transport costs, household budgets, and business margins. If inflation proves persistent, interest rates may remain higher for longer. Governments refinancing debt then face harder choices, while voters facing squeezed incomes demand relief.
There are feedback loops here. There are competing forces. AI might reduce some costs while increasing demand for scarce infrastructure elsewhere.
A confident forecast can conceal a surprisingly narrow field of vision.
Intelligence needs a little opposition
Whether in military service, operational leadership, or managing capital, I have learned that the greatest threat to good judgment is quiet consensus. The appeal of a latticework is that it gives our preferred explanation some competition.
Psychology asks whether we believe something because the evidence supports it, or because everyone around us has made money believing it.
Biology reminds us that systems must adapt, and that previous success can leave an organisation poorly equipped for a changed environment.
History encourages us to examine debt, power, and speculative enthusiasm without assuming that the next episode will follow the last one precisely.
Mathematics makes us distinguish a plausible outcome from a probable one, and a probable outcome from one already reflected in the price.
None provides a master key. Together, they expose weaknesses we would otherwise miss.
That requires humility and the truth to face facts, especially when they expose an error in our thinking. Reading widely is useful only if it makes us more willing to question ourselves.
I can construct a persuasive argument for almost anything if I choose my evidence carefully enough. So can most investment professionals.
The harder question is: what would persuade me that I am wrong?
Breadth must change behaviour
There is little value in an impressive reading list if the portfolio remains untouched by what we learn.
If several investments depend on cheap capital, abundant energy, and continued enthusiasm for the same technology, we should recognise the shared exposure.
If a thesis depends on refinancing, we should examine what happens when funding becomes expensive or unavailable.
If the opportunity is compelling but the price assumes near perfection, we should have the patience and freedom to wait, unbound by the noise of the crowd.
And if the evidence changes, we must have the dignity to change our minds without treating it as a personal defeat.
These are standards to keep working towards. They are easy to describe and much harder to maintain when markets reward euphoria.
At Trinity, this is the discipline we want to bring to our thinking: examine the connections, challenge the assumptions, understand what can hurt us, and preserve the ability to act.
We will miss things. Everyone does.
But we should keep widening the lens.
The arrival of a genuinely important investment insight rarely happens in isolation. It may begin on the business pages. It may also begin in a history book, an engineering problem, or a conversation with someone whose working life looks nothing like our own.
Read widely. Think carefully. Hold your convictions accountable.
The world will keep joining the dots. Our job is to notice.
