Invert, Always Invert: A Smarter Way to Think About Investing

Gustav Jacob Jacobi, the German mathematician, had a simple but profound approach to solving difficult problems: “Invert, always invert.” Instead of attacking a problem head-on, he believed that flipping it around and looking at it backward often revealed the best path forward. Charlie Munger applied this idea to investing, arguing that avoiding stupidity is often easier than seeking brilliance.

This way of thinking has stuck with me. We spend so much time chasing the right stocks, the perfect strategies, and the next big opportunity. But what if the real key to long-term success is avoiding obvious mistakes? Emotional decisions, unsustainable bets, and herd mentality. These are the things that quietly destroy wealth. Inversion forces us to ask: What would almost guarantee failure? And then… just don’t do that.

In many ways, this blog is my way of tipping my hat to Seeking Alpha, a place that has long encouraged thoughtful investing. In finance, "alpha" refers to how well an investment outperforms or underperforms its benchmark, while "beta" measures its volatility relative to that benchmark. In other words, seeking alpha is about generating excess returns, while avoiding beta is about managing risk. If Munger was right, and I strongly believe he was, then the smartest thing we can do isn’t blindly searching for success, but systematically avoiding failure. Because in the end, “avoiding beta” is just another way of “seeking alpha”.