Learnings from Robert Caro's "Working"

Robert Caro is known for his biographies of political figures such as Robert Moses and Lyndon Johnson. Caro's epic biographies are renowned because of his forensic research process and relentless pursuit of facts. Caro's latest book, 'Working', is an autobiographical text that allows us to gain insight into the methodology of the world's greatest biographer. As an aspiring investor, who is just beginning to realise the importance of meticulous research, I wish to reflect on how some of my key learnings from 'Working' can be applied in the investing world.

Make sure to be thorough
Caro received one piece of advice when he became an investigative journalist: "Turn every page. Never assume anything. Turn every goddamned page." Ever since, this philosophy has been the cornerstone of his research process; a relentless pursuit of the truth underpins Caro's writing.

The more facts you accumulate, the closer you come to whatever the truth is. And finding facts...takes time. Truth takes time. 

A relentless pursuit of facts is of immense importance in investing because it can enable better decisions. However, I must add a caveat. While the past is undoubtably important, investing is less about the past and more about the inherently uncertain future. Thus, it is necessary to accept some uncertainty, provided you understand the limitations of what you know. This is because if you spend your whole life researching, continuously deferring action, you will never make a single investment.

Thought precedes communication
Caro's Princeton professor once told him to "Stop thinking with [his] fingers". I would want to supplement that phrase with another: Stop thinking with your lips. I am targeting both learnings mostly at myself (the lord knows I need to hear them on repeat!).

I can't start writing a book until I've thought it through and can see it whole in my mind. So before I start writing, I boil the book down into three paragraphs, or two, or one - that's when it comes into view.

You only have to watch CNBC's Squawk Box or Closing Bell to know that these tenets would be applicable in the investing world too. Indeed, we seem to suffer from an irresistible urge to quickly publicise our baseless, speculative thinking on the direction in which the market will move next, and to offer instant, frequently-dubious explanations for recent market movements. I know from experience how tempting it is to write without due consideration and speak without proper reflection. This is why I intend to learn from Caro's rigorous process in which thought precedes communication.

Talk to the people that matter
Caro's research relied heavily on being able to speak to people for long periods of time. During these interviews, Caro always asked questions like "What did you see? What did you hear?" They are unusual questions, but they are useful ones; they allow you to learn more about the atmosphere and setting in which an event occurred. In addition, he urges the interviewers to let the interviewees (and not themselves!) fill moments of silence. That way, you might just "find out things from them that maybe they didn't even realise they knew". 

You have to keep going back to important people - people who were important not necessarily because of their status but because of what they saw.

When you become a stockholder in a business, you make the active choice to own a part of it. Before making such a big decision, you have to be sure that you understand the business you are buying into. Therefore, it is important to speak with managers and employees - particularly those employees who are on the frontline - because they are important people. They should know the business better than anyone else, and speaking with them should allow an investor to have a deeper understanding of said business.

'Working' is undoubtably one of my new favourite books. For me, it is the ultimate guidebook on effective research. It should be required reading for all researchers.