2-minute read
Naval Ravikant built a $100+ million fortune by doing something most people refuse to do: ignore expert opinions and go directly to source material.
While others consume summaries, interpretations, and derivative analysis, Naval reads the original research, foundational texts, and primary sources.
How The Framework Works
Step 1: For any important domain, identify the 1-3 most fundamental texts or sources. Find the original research, not commentary about the research. The primary studies, not the meta-analyses. The foundational books, not the book summaries.
Step 2: Study these deeply rather than consuming numerous secondary sources. Spend 10 hours with the original rather than 1 hour each with 10 interpretations. Most people do the opposite.
Step 3: Before major decisions, ask "What are the fundamental principles at work here?" Strip away opinions, trends, and interpretations to identify the underlying mechanisms.
Step 4: Separate principles that have stood the test of time from temporary trends. Distinguish between what's fashionable and what's fundamental.
Step 5: Apply first-order thinking based on fundamentals rather than second-order thinking based on others' interpretations. Think directly from principles rather than through the filter of expert opinions.
Real-World Application
When evaluating cryptocurrency investments, most people read analyst reports and Twitter threads. Naval went to the Bitcoin whitepaper, studied cryptographic principles, and analyzed network effects from first principles.
Result: He made early investments in Bitcoin and Ethereum based on fundamental understanding, not market sentiment.
Why This Matters
Information cascades create collective errors. When experts interpret other experts' interpretations, small mistakes compound into major miscalculations.
Research on information cascades shows how derivative knowledge leads to systematic errors across entire industries. The 2008 financial crisis exemplified this: mortgage-backed securities were rated based on models that were based on other models, with few people examining the underlying loan quality.
Your brain processes information more efficiently when it comes from primary sources. Secondary interpretations create cognitive noise that impairs decision-making under pressure.
The principle: Fundamental understanding beats expert opinion. When everyone is reading the same summaries, competitive advantage comes from reading the source.
