Understanding Your Circle of Competence

Understanding your circle of competence is crucial in business and beyond. Despite being reasonably good at identifying their circle of competence, individuals often go outside of it, leading to mistakes. It is common to overestimate understanding in areas like retail. Reflecting on past decisions, like buying Berkshire Hathaway and making control purchases, underscores the importance of self-assessment. Some individuals excel at appraising their talents and shortcomings better than others.