Greetings,

Justice Litle here—editor and founder of Consilient Investor.

This is the ‘about' section of the site, so here is the short and sweet version.

Consilient Investor is a broad ranging collection of articles ( written by yours truly) on markets, trading and investing... and big ideas related to such.

With that said, it's impossible to convey what CI is truly about in just two sentences. What follows is the extended version (written in casual conversation style).

Thanks for dropping by. I hope you enjoy the visit… and return again soon.

Justice

I. What is Consilient Investor?

II. Who is Justice Litle?

III. How is CI content organized?

IV. Where did ‘Consilient' come from?

V. Have Laptop &ndash Will Travel

I. What is Consilient Investor?

A thoughtful approach

The Italians have a wonderful tradition, la passeggiata, that roughly translates as "a stroll through town in the cool of the evening." I prefer to take mine in the cool of the morning, shortly after sunrise, on the walking trails near my home. The high desert of Northern Nevada releases its heat each evening; in the hour after first light, even mid-July feels like a crisp October afternoon.

That little slice of life captures some of the Consilient Investor spirit. CI embraces a relaxed, thoughtful approach… to markets and to life. Knowledge is something to be savored, like a fine piece of music or an exquisite meal. Appreciation for subtlety is cultivated, not rushed.

This has bearing on market success too. As Paul Tudor Jones (known as "the Michael Jordan of trading") has said, ,

The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge.

The words hold true from an investment perspective also. The value of knowledge applies across all time frames.

A knowledge network

Much of the seed material for Consilient Investor was previously scattered far and wide… flung to the four winds in notes and journals, hidden in old publications, buried in threads on message boards, and so on.

My belief is that bringing this material together—organizing it, connecting it, building on it—could seed a powerful knowledge network driven by Metcalfe's Law. (Robert Metcalfe, inventor of the ethernet, hypothesized that a network's value is equal to the square of its nodes, or connection points. While the number of connections increases arithmetically, the value of the network increases exponentially.)

For computer networks and knowledge networks alike, connectivity is the thing; as Lee Humphries has put it, "reflection compounds knowledge."

What we have now (as I write this introduction in mid-2007) is only the beginning. At this point in time there are far more articles unwritten than written... more books unreviewed than reviewed... more territory unexplored than explored... and so on. Things have only just begun to get interesting.

Like neurons in the brain, building connections among the nodes will take time. The ever-evolving result should be something like a living jigsaw puzzle; with each additional piece, clarity increases.

With the help of constructive feedback (perhaps from you) and consistent shaping, a valuable structure will be created... with much of the value residing in the structure itself.

Pragmatic goals

On a personal level, Consilient Investor is the embodiment of three goals:

1) To build a (modest) fortune through my own investing and trading efforts. More for the challenge than the money… the sheer enjoyment of pursuit. Robert Pirsig nailed it:

To live only for some future goal is shallow. It's the sides of the mountain which sustain life, not the top. Here's where things grow. But of course, without the top you can't have any sides. It's the top that defines the sides.

2) To have a lot of fun along the way. After all, you only live once. (Unless you're James Bond.)

3) To learn as much as I can in the process. Not just about markets, but about life, the universe and everything. (One might consider CI a hitchhiker's guide of sorts.)

If there is any overlap between my goals and your goals, you might want to stick around.

I further hope that, by sharing my ideas and beliefs openly, I can draw together a vibrant community of like-minded market participants. (You never know what the future holds. One day, you and I could find ourselves conversing over drinks in Lake Tahoe, or London, or Sydney... or some other such place.)

The serious business of play

To further address point number two in the list above (on having fun along the way)...

There is an awful notion some hold to that successful investing must be boring. If it's not boring, these dour-faced schoolmarms tell us, then it means you are doing it wrong.

Ugh. To these soul-sapping killjoys, I offer the words of Oliver Cromwell (as delivered to the Rump Parliament): "You have sat here too long for any good you can do. Depart, I say, and let us have done with you. In the name of God, go."

CI is much more in tune with Chinese philosopher Dr. Lin Yutang, who observed the following some 70 years ago:

Knowledge, or the process of seeking knowledge, is a form of play; it is certainly so with all scientists and inventors who are worth anything and who truly accomplish worthwhile results.

Albert Einstein contributed his success to a process of "combinatory play," deeming it "the essential feature in productive thought." Dale Carnegie said that "people rarely succeed unless they have fun in what they are doing."

Furthermore, if Yutang and Einstein are wrong—or if the process of investing is somehow exempt from such wisdom—then how does one explain the most famous investor of all time?

Warren Buffett has referred to his Kiewit Plaza offices as "the Pleasure Palace," and, in reference to his work, has been known to make remarks like "I could be tap dancing right now."

Does that sound like a man who is bored to you?

The offspring of pumas, snow leopards, and other big cats need more than physical strength to survive on their own. They must spend a year-and-a-half to two years with their mothers, learning the finer points of the hunting game. They practice from a very early age—without realizing it of course—because their play is a form of practice, and their practice is a form of play.

Learning to trade and invest is not so different. The market participant who enjoys himself—giving full effort, yet maintaining a sense of playfulness—will eventually surpass the grump who sees it all as a horribly serious chore. It is simply easier to learn when having fun; ask any puma cub.

On taking things lightly

Another key tenet of the CI worldview is that, at the end of the day, markets are not a matter of life and death. (In some respects, life and death are not a matter of life and death. The way some carry on, you would think the fate of the universe is at stake.)

Jesse Livermore, arguably the greatest speculator of all time, said this:

It is literally true that millions come easier to a trader after he knows how to trade, than hundreds did in the days of his ignorance.

Why might this be so?

Perhaps because the wise market participant has learned, after a fair share of whacks upside the head, what to take seriously and what to make light of. Neophytes and dabblers, on the other hand, tend to be "all or none"… deadly serious about every little thing, or not serious about anything at all.

The previously cited Dr. Lin, a genius observer of human nature, further notes that a light touch is the calling card of mastery. The capable man tends to his affairs with dexterity and good humor. And why shouldn't he? There's no point to being grim-faced without need, unless some demon is driving you.

In his Market Wizards series, author and analyst Jack Schwager discovered something quite interesting. After interviewing dozens of the best traders in the world, Schwager was dazzled by the diversity of styles and methods he came across.

And yet, the uniting thread Schwager discovered was that, regardless of approach, every trader had found a pair of comfortable shoes that fit. Their market methods were molded to fit them, not the other way round. When work is play, the burden is light.

One individual's view

Consilient Investor's content is not assembled by committee. There is no attempt to present a "fair and balanced" opinion of things, or to please the palate of any particular focus group. CI is essentially one individual's view of the world and what's in it... and an individual 2,700 miles from Wall Street at that.

As a result, your ideal investing and trading profile will be different than mine. You may be more weighted towards the investing side, or the trading side, or have different ideas on risk. You may have different mental models, or prefer a different set of market metaphors, or disagree with large chunks of my approach entirely. That's all wonderful; it takes all kinds to make a market.

In other words, CI is not like a horse pill meant to be swallowed. Think of it more like a nine-course meal. Sample whatever looks interesting; eat well of the dishes you like; pass up the ones you don't.

Speaking of "one person's view," you may be wondering... who is this person anyway?

< back to top

II. Who is Justice Litle?

Let's see, where to begin...

My adventures in financial journalism began at age eight, courtesy of an IBM typewriter and a well-lit shoe closet at grandma's house...

Hold on, that's too far back. Better try again.

I studied literature and philosophy at a tiny Presbyterian liberal arts college. I also spent a few wonderful years abroad, studying in places like Oxford University (Oxford, England); Palacky University (Olomouc, Czech Republic); and Macquarie University (Sydney, Australia).

The original plan was to get a PhD and settle into the academic life. I wanted to be the type of professor who inspires his students (O Captain My Captain etcetera). I wanted to wear tweed blazers with suede elbow patches, ride an old bicycle around campus, and write books in the summers.

At an open air market in Budapest, I even picked up a tobacco pipe.

Everything changed, however, when I came across The Investment Biker by Jim Rogers, a tale of macro investing around the world by way of motorcycle. The idea of making money by thinking—putting the puzzle pieces together—was so immediately gripping, I could no longer imagine doing anything else.

Academia went out the window; from then on, markets were my destiny. I read everything I could get my hands on, from Keynes' General Theory to Lefevre's Reminiscences of a Stock Operator. (I have easily read hundreds of books on investing and trading since then… not to mention history, psychology, biology, physics, etcetera… and continue to read twenty or so new books a year. Before pulling the plug I was a top 1,000 reviewer on Amazon.)

Fresh out of college, I took a job at Commodity Resource Corp., a firm nestled against the unlikely backdrop of Lake Tahoe. (A tough place to live, but someone's got to do it.)

At Commodity Resource, I dealt with traders and hedgers on every continent but Antarctica. In my three years of brokering, clients ran the gamut... from soybean farmers to cattle ranchers to energy consultants to scrap metal dealers (and all points in between).

In helping my clients devise and execute trading strategies, I got an up-close-and-personal look at what felt like every trading approach under the sun... including the ones that didn't work.

During those years I also undertook an extensive personal study of the trend-following methodology, wrote multiple articles for Futures Magazine, gave regular market commentary to the likes of Reuters and Dow Jones, and wound up making contributions to the best-selling book, Trend Following: How Traders Make Millions in Up or Down Markets. My best client was a Russian hedge fund.

Hungry to broaden my horizons, I eventually left the commodities world to start an equity trading partnership. The new venture came just in time for one of the most rough-and-tumble stock market years in history, 2002. Nonetheless, the partnership progressed (and my knowledge of equities along with it) until my key investor decided to pull his funds and put them in a land deal. (Given the real-estate boom that followed, I can hardly fault his timing.)

From there I took a temporary side road into marketing and consulting (including a ten month stint at an advertising agency) while continuing to fine-tune my investing and trading strategies all the while.

Through a combination of good fortune and good timing, I eventually found myself at the helm of Outstanding Investments, a natural resource investment newsletter. During my tenure as lead editor, OI was top-ranked by Hulbert Financial Digest two years in a row for investment newsletter performance.

In early 2007, it was time to expand the old horizons once again... and the path led here, to the site you are visiting now.

< back to top

III. How is CI content organized?

Consilient Investor content is organized into five sections: Market Commentary, Themes & Trends, Trading & Investing, Latticework, and Book Reviews.

Here are brief descriptions of each.

Market Commentary.Consilient Investor strives to dig deeper and get behind the news... to deliver the real story, no holds barred, and help readers make sense of it. Through Macro Musings and Tactical View, we keep you up to speed on key developments in global markets.

Themes & Trends. A handful of elite research firms charge as much as $25,000 to $50,000 a year for their services. The focus of these firms is generally twofold: navigating the macro landscape and hunting for big ideas. The goal of Themes & Trends is to bring you a comparable quality of thought and insight.

Trading & Investing. Einstein saw science and art as inseparable at the highest levels, tending to "coalesce in aesthetics, plasticity and form." In that spirit, CI explores both the art and the science of trading and investing, from the mathematical to the metaphorical.

Latticework.Charlie Munger, the lesser known partner of Warren Buffett, believes that 'mental models' are key to understanding how markets work. These models should create a support structure on which understanding can grow (like vines on a latticework). Here we seek new understanding through the lens of various disciplines, making new connections and building out the latticework.

Book Reviews.The business of trading and investing has a wonderful side benefit. It provides an excuse for delving into countless disciplines: history, psychology, biology and physics just to name a few. CI offers reviews of those special books that fascinate, educate, and entertain. 

< back to top

IV. Where did ‘Consilient' come from?

Over the course of my travels thus far, I have come across more life-enriching and knowledge-enhancing books than I can count. But only a few have had deep and profound impact on my perceptions of the world.

One of those books was Consilience, by noted biologist Edward O. Wilson.

The American Heritage Dictionary defines consilience as "the agreement of two or more inductions drawn from different sets of data." Consilience is more loosely defined as "a jumping together."

In his book of that title, published in the late nineties, E.O. Wilson lays the groundwork for a wildly ambitious quest... pursuit of the unity of knowledge. More specifically, uniting all branches of knowledge under the banner of the natural sciences.

In a nutshell, there are too many knowledge gaps between the disciplines. These gaps create air pockets of ignorance that need to be ironed out. Because, say, economists and biologists and physicists aren't much good at talking to each other, valuable cross-applications are lost in the gaps. By encouraging a "jumping together" of the various branches, the gaps can slowly be filled in... resulting in a unified whole that is far more valuable than the sum of its parts.

As I inhaled Wilson's vision a few years back, it struck me that I was on a similar quest—uniting all branches of market discipline under the banner of maximum profit!

In honor of that realization (and in homage to the power of Wilson's ideas), I tend to think of my unorthodox market path as the "consilient approach" to trading and investing.

One can certainly see a "jumping together" of experiences thus far. Consider: I cut my teeth in the wild west commodities markets, trading everything from cattle to currencies to cocoa; then moved on to equities trading; and then immersed myself in the fine arts of global macro, bottom-up stock picking, and value investing.

And of course, the horizons are still expanding to this day. (If anything the pace is accelerating.)

Over the past decade, I have conversed with some of the best traders in the world. I have also absorbed direct lessons from some of the savviest investors in the world... money managers who run hundreds of millions, or even billions, in a variety of styles.

Trend following... value investing... growth investing... futures trading... options trading... arbitrage... ETFs... global macro... all have great intrinsic worth, and all offer wonderful opportunity for cross-pollination.

Wall Street is accustomed to separating these elements, putting them in their various style boxes, and leaving it at that. Sometimes your style box works well and sometimes it doesn't. Sometimes the sun shines and sometimes it rains. Shrug.

But the consilient approach says, Why be confined to a box? Instead, why not adapt to terrain changes by cultivating as much versatility as possible?

In terms of latent potential, the human brain is the most powerful thing in the history of the universe . . . and the defining attribute of the brain is its incredible plasticity. As Robert Heinlein once said,

A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.

It seems obvious in hindsight. So why, then, do so many Wall Streeters have one-dimensional mentalities? Why do style boxes dominate?

Here are a few educated guesses. Professionals are expected to focus on one discipline, one conceptual approach. Many of them wind up pigeon-holed by investment allocation committees… pinned down by a checkmark. Others become prisoners of their comfort zone, hesitant to risk looking foolish in pursuit of new vistas. Lord Keynes' wry observation still rings true; on Wall Street it is better to fail conventionally than succeed unconventionally.

On top of that, most professionals spend their time hanging out with others who think and act the same way. Value guys generally don't mix with Macro guys. Investors don't hang out with traders. Fundamentalists are typically at odds with technical analysis types. And so on.

As a result of this reinforced partitioning, an all-too-human tribe mentality sets in. The tribe mentality dominates most investing and trading disciplines, just as it still dominates academic and scientific disciplines. (My time at Oxford opened my eyes to how amazingly petty academia can be; I later came to realize Wall Street is just as bad.)

"My way or the highway" is a widely expressed sentiment (as if there were only one path up the mountain, rather than many). The habit of dismissing, belittling, or otherwise mischaracterizing any "not practiced here" approach is incredibly common. And incredibly sad.

The consilient approach differs in that it embraces diversity from the start. Through a mindset of vigorous curiosity, it brings access to multiple strategies, multiple channels of thought.

This versatility can be beneficial when faced with the challenges of a shifting landscape; the wider the variety of environments one can thrive in, the more time will be spent thriving on the whole. Furthermore, the consilient approach is deeply rooted in a passion for 360 degree understanding. The emphasis is not just on what works, but on discovering how and why it works. This requires ongoing cross-pollination from conventionally disparate fields of inquiry.

< back to top

V. Have Laptop – Will Travel

The seed that grew into Consilient Investor was first planted years ago, via my Amazon.com review page. The "book review thing" started as a mere hobby, but soon grew into something more.

I was surprised by the range of people who contacted me via my growing collection of reviews. Eventually the light bulb clicked on... shared knowledge is a powerful relationship-building tool. (Consilient Investor is an expanded version of that insight.)

In my ongoing pursuit of la dolce vita—the sweet life—I have come to believe that interesting people and projects are key.

And so, like Paladin from the old TV show, I'm content to roam the globe… with a laptop instead of a derringer… offering my services in search of new adventure.

If you think you might like to work with me in some capacity... or just want to kick ideas around... or, heck, just want to introduce yourself and say hello... I encourage you to get in touch.

You can reach me via justice [at] consilientinvestor.com.

Thanks again for visiting.

JL

< back to top