Invest Like A Scout

TruePoint Capital

Think about the differences in mindset between a soldier and a scout. A soldier’s role is to defend or attack without question. Soldiers are single-minded and do whatever it takes to protect themselves and shoot down their opponent’s position.

A scout’s goal isn’t to defend one side over the other. It’s to go out, survey the landscape, and come back with an accurate map. Regardless of what they hope to be the case, the scout wants facts to know what’s true.

Towards that goal, they’ll gather as much information as they can to analyze and assess all relevant data objectively to devise the most accurate map. Along the way, if they find one or more of their assumptions is flawed or inaccurate, the scout will revise the map. In other words, they’re willing to modify their thinking. Good scouts explore all possibilities and are investigative and curious. They shut out all preconceived notions and biases and look purely at the facts at hand.

In her book, The Scout Mindset: Why Some People See Things Clearly, and Others Don’t, author Julia Graf explores the soldier vs. scout mentality in our behaviors and why it’s better to have a scout mentality than a soldier mentality when it comes to making decisions.

Graf summed up her book in the following Twitter post:

​​Hey guys, I’m excited to announce that my first book is coming out on April 13!

It’s about something I call a “scout mindset” – the motivation to see things as they are, not as you wish they were, to be intellectually honest and curious about what’s true.

Galef says that many of us have a built-in soldier mindset, which means we see the things we want to see. This myopic mindset is based on emotions such as defensiveness and tribalism, and changing your mind or admitting you’re wrong is seen as a weakness or defeat.

Soldiers are driven to defend the ideas they want to believe and shut down those that challenge them. The soldier mindset will prevent a person’s progress because what is there to learn or change when you already have all the answers?

Scouts act as if they don’t have all the answers, and that’s why it’s better to have a scout mentality than a soldier mentality.

​​”Scout mindset allows you to recognize when you are wrong, seek out your blind spots, test your assumptions, and change course,” says Galef. “It’s what prompts you to honestly ask yourself questions like ‘Was I at fault in that argument?’ or ‘Is this risk worth it?’

Are you more like a soldier or more like a scout when it comes to investing?

Most mainstream investors have been shaped by their upbringings and by Wall Street, their families, colleagues, the internet, and financial media to think there’s only one way to invest – the Wall Street way. Like the soldier, whose job is to defend their territory and win against the opposition, an investor with a soldier’s mindset will protect their investments to the grave and aren’t willing to consider other options or possibilities.

Many successful and ultra-wealthy investors learned early on to adopt a scout mentality when it came to investing. They were willing to ignore everything they were brought up to believe in to explore new possibilities and avenues. Not only did this type of investor approach all investment options with an open and curious mind, but more importantly, they were willing to change course if they discovered they were on the wrong path.

Having a scout mentality when investing means having humility. Sometimes, it’s admitting what you’re doing isn’t working and trying something else. No matter the situation or the opportunity, it’s always better to invest like a scout than a soldier.

​​Being open-minded and curious will always lead to better decision-making and better investment results.