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Welcome back to The PyUncut Investing Podcast — where we decode not just the markets, but the mind behind the money.
In today’s episode, we’re exploring one of the deepest truths of investing — that it’s better to be roughly right than precisely wrong.

It’s a lesson that separates wisdom from arrogance, and experience from illusion.
Because in a world where everyone loves exact numbers, the real masters of investing are the ones who admit… they don’t really know.

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Segment 1: The Dinosaur Lesson — A Story About Precision

Let’s begin with a story.

A group of tourists visits a dinosaur museum. The guide, full of enthusiasm, points to a huge T-Rex skeleton and says,
“This fossil is 100 million and 5 years old.”

The crowd is amazed — not by the number, but by how exact it sounds.
One curious visitor asks, “How do you know it’s exactly 100 million and 5 years?”

The guide smiles:
“Well, five years ago, an expert told me it was 100 million years old.”

Funny? Yes. But also, deeply human.

Because that guide represents how many investors behave.
We love numbers — the illusion of precision.
Target prices like $734.25. EPS forecasts to the decimal.
DCF models that spit out “fair values” down to the paisa.

But here’s the truth — in investing, precision is an illusion.

You might feel smarter when you predict the “exact” future price of a stock.
But markets don’t obey your Excel sheet.
They dance to chaos, to behavior, to uncertainty.

As John Maynard Keynes once said:

“It’s better to be roughly right than precisely wrong.”

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Segment 2: The Trap of Physics Envy

Charlie Munger once coined the term “Physics Envy.”

It’s our obsession with applying scientific precision to messy human systems — like economics and markets — where such precision doesn’t belong.

In physics, formulas work. Gravity pulls the same way every time.
But markets? They’re living, breathing organisms made of human behavior.
And humans are emotional, inconsistent, and beautifully unpredictable.

Munger put it perfectly:

“The craving for physics-style precision does little but get you in terrible trouble.”

Investors, analysts, and even economists love to sound scientific.
We build valuation models with complex equations, multiply them by “assumed” growth rates, and feel in control.
But that’s the problem — it’s false control.

In truth, markets are complex adaptive systems — always changing as participants react to each other’s behavior.
The moment a formula seems to work, the market evolves — and the formula breaks.

So when you hear an expert say,
“Our model suggests a price target of $812 by next March,”
remember — they might just be the museum guide all over again.

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Segment 3: Why We Crave Precision — The Psychology of Ambiguity Aversion

Why do we fall for this illusion?

Because our brains hate uncertainty.

Psychologists call this ambiguity aversion.
We prefer a wrong but precise answer over an honest “I don’t know.”

That’s why you’ll find analysts publishing target prices down to two decimals,
funds promoting their “3-year CAGR of 17.26%,”
and investors comparing expense ratios like 0.86% vs 0.91% — as if that tiny difference will define their destiny.

It’s comforting to believe we can measure the future.
It makes us feel safe.
But in investing, comfort is often the enemy of truth.

Warren Buffett once said,

“Price is what you pay, value is what you get.”

But that second part — value — is a moving target. It’s not a number on a screen.
It’s an estimate that lives within a range.
The smart investor embraces that fuzziness.
The naive one tries to pin it down to a single “exact” number — and pays the price later.

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Segment 4: The Excel Illusion — When Numbers Turn to Fiction

There’s an old joke among value investors:

“More fiction has been created in Excel than in Microsoft Word.”

And it’s true.

Excel gives you the illusion of mastery — that every cell, every formula, every decimal can define reality.
You can tweak assumptions, discount rates, and growth projections until you get the “perfect” valuation.

But that’s the trick — it’s your perfect world, not the real one.

Change your growth assumption by just 2%, and your DCF collapses.
You thought you were measuring truth with a millimeter ruler.
In reality, you were measuring a moving object.

The best investors — from Buffett to Munger to Howard Marks — know this.
They don’t chase perfection. They look for approximation with margin of safety.

They understand that “roughly right” is not sloppy — it’s realistic.

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Segment 5: Humility as a Strategy

So, what does it mean to be roughly right in practice?

It means thinking in ranges, not points.
It means accepting that intrinsic value is an estimate, not an answer.
It means using probabilities instead of predictions.

When you ask a great investor what a stock is worth, they won’t say $812.25.
They’ll say, “Somewhere between $700 and $900, depending on future conditions.”
That range reflects humility — a deep awareness that the world doesn’t fit our neat models.

And this humility is not weakness.
It’s wisdom in disguise.

Because every time you anchor on a precise number — you stop thinking.
You start believing that the world owes you that precision.
And when it doesn’t, you panic. You sell. You lose.

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Segment 6: Target Prices, Anchoring, and the Confidence Trap

Let’s talk about target prices — one of the most seductive illusions in investing.

You’ll often see brokerage reports that say:
“Target Price: $734. 12-month upside potential: 18.7%.”

Sounds scientific, right? Precise. Credible.

But as Nobel laureates Daniel Kahneman and Amos Tversky showed, this taps directly into our anchoring bias.
Once a number is mentioned — even if it’s arbitrary — our minds attach to it.
That number becomes a psychological anchor.

You stop seeing reality and start seeing proximity — “It’s only 50 dollars away from target!”
And suddenly, your decisions are no longer about value — they’re about emotional proximity to an illusion.

Anchors are comfortable.
But in investing, comfort often equals complacency.

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Segment 7: Mutual Funds, Data, and the Precision Mirage

Even mutual fund investors aren’t immune.
People love comparing past performance with the precision of a lab test.

They’ll say,
“This fund gave 15.28% CAGR, that one 15.62%. I’ll pick the second!”

Ignoring the bigger questions —
What’s the fund’s philosophy?
What’s the risk level?
What’s your own behavior during downturns?

Because the truth is — the biggest driver of your returns isn’t your fund manager; it’s you.

Your temperament.
Your patience.
Your ability to stay calm when everyone else is running for the exit.

Precision is a comfort blanket.
But conviction — that’s what keeps you warm in the storm.

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Segment 8: Learning to Live with Fuzziness

Here’s the paradox of markets:
The more certain you try to be, the more fragile your strategy becomes.

The best investors learn to live with uncertainty.
They make peace with “I don’t know.”

They use concepts like margin of safety — not to eliminate uncertainty, but to create room for it.

“The real advantage in investing doesn’t come from chasing a perfect number, but from shrugging and admitting — I don’t know.”

That sentence captures the core of investing psychology.

It’s about learning to sit with fuzziness.
To be comfortable being uncomfortable.
To know that markets don’t owe you clarity — they owe you opportunity, and it’s your job to stay humble enough to see it.

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Segment 9: The Takeaway — Embrace the Chaos, Not the Calculator

So, what’s the takeaway for us, the everyday investor?

It’s simple:
Stop chasing precision.
Start embracing probabilities.

Don’t let Excel give you confidence that reality hasn’t earned.
Don’t let someone else’s “target price” anchor your expectations.
Don’t confuse being smart with being right.

In a market filled with overconfidence, humility is your edge.

Be okay with being roughly right.
Because the moment you believe you’re precisely right, you’ve already gone wrong.

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Segment 10: Closing Thought

Let’s end with a line from Albert Einstein, quoted often by Munger:

“A theory should be as simple as possible — but no simpler.”

That’s how we should treat investing too.
Keep it simple, but not simplistic.
Accept complexity without pretending to master it.
And remember: every number in finance hides a story. Every model hides a bias. Every forecast hides a hope.

The goal isn’t to predict the future perfectly.
It’s to survive — and thrive — despite not knowing it.

So next time you open Excel, pause for a second.
Ask yourself — am I chasing truth, or just comfort?

Because in the long run, it’s not precision that builds wealth.
It’s perspective.

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🎧 You’ve been listening to The PyUncut Investing Podcast — where we go beyond numbers to explore the psychology of wealth.
If this episode made you rethink how you view “certainty” in markets, share it with someone who’s still chasing precision in their portfolio.

Until next time, remember:
Stay curious. Stay humble.
And always, stay roughly right.

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Investing psychology, Vishal Khandelwal, Charlie Munger, Physics Envy, ambiguity bias, investor mindset, PyUncut philosophy, value investing, Excel illusion, market behavior

In this PyUncut episode, we explore why investors crave false precision, how “Physics Envy” traps smart minds, and why the best investors embrace uncertainty. Learn how humility, probability thinking, and margin of safety can transform the way you invest.

#InvestingPsychology #PyUncut #CharlieMunger #VishalKhandelwal #ValueInvesting #InvestorMindset #PhilosophyOfMoney #MarketWisdom #BetterRoughlyRight #BehavioralFinance

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