Most investors make decisions based on what they see now — interest rates, inflation, bad headlines. But if you want to truly outperform, you need to think beyond that.
Welcome to the world of second-level thinking.
What is Second-Level Thinking?
It’s about out-thinking the average investor.
It’s not just knowing something — it’s knowing what others know, and how your view differs.
First-level thinking:
"Inflation is high, sentiment is bad → sell stocks."
Second-level thinking:
"Inflation is high, sentiment is bad → stocks are cheap. Buy now when everyone’s fearful."
The greatest investors — from Howard Marks to Warren Buffett — don’t just follow the news.
FIRL
Most investors make decisions based on what they see now — interest rates, inflation, bad headlines. But if you want to truly outperform, you need to think beyond that.
Welcome to the world of second-level thinking.
What is Second-Level Thinking?
It’s about out-thinking the average investor.
It’s not just knowing something — it’s knowing what others know, and how your view differs.
First-level thinking:
"Inflation is high, sentiment is bad → sell stocks."
Second-level thinking:
"Inflation is high, sentiment is bad → stocks are cheap. Buy now when everyone’s fearful."
The greatest investors — from Howard Marks to Warren Buffett — don’t just follow the news.
They interpret it differently.
My Personal Experience
I’ve seen this play out with stocks like...
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1 month ago | [YT] | 2