The name is quite self-explanatory. If you don't use a certain skill, you tend to lose it gradually. The most common example that we all grow up hearing is about our tail bone. Human beings, in their evolution from apes, lost their tails as they stopped using it over time. The same holds true for the various mental and physical skills that we possess.
You may recollect that when you were younger, there were many things you could do very well. But as time passed and you lost touch with those things, the skills have either diminished or have been forgotten completely.
Often, you may not immediately notice that a skill is attenuating. For instance, say a person excelled in Science and Sanskrit when he was in school or college. But on account of a marketing job, he made little use of his knowledge in those subjects. Slowly, over time these skills shimmered away. Each of us can name several such instances.
What can one do to avoid such loss of useful skills? The only way to keep such skills alive is to use them regularly. The importance of regular practice is especially very vital in skills of a very higher order. For example, a Polish pianist called Paderewski once admitted that if he did not practice even a single day, he could notice some deterioration in his performance. And if he did not practice for as long as one week, the audience would also be able to notice the difference.
Similar is the case with aircraft pilots. It is crucial that they remember all the necessary skills that are required while flying, though all of them may not be frequently used. Any deterioration in vital skills can result in destruction of people and property.
Charlie Munger suggests using something that is a functional equivalent of the aircraft simulator employed in pilot training. While investing is not a rocket science, there is no reason to take it too casually. Many people take investing as a side business which can be done without putting in too much time and effort. And that is one of the biggest fallacies. Legendary investors such as Warren Buffett, Charlie Munger and Peter Lynch did not create great fortunes out of thin air. They are known to be rigorous practitioners of their art. They all read extensively and spend a huge amount of their daily routine analysing companies. In other words, by using their mental skills meticulously, they have become successful pilots of the investing world.
We will continue to discuss some more thinking errors and psychological tendencies that can affect your investment decisions in the subsequent articles of this series.