This is a map of what Christopher Columbus and his contemporaries thought the world looked like in 1490.
- First, he thought the world was about 25% smaller than what it actually is.
- Second, they apparently didn’t have any idea of the great land masses to the west, what would later become known as North and South America.
- Third, the shapes of various land masses they were aware of were grossly inaccurate.
From our vantage point today, it seems our ancestors were pretty far off from reality.
What did it take to update our understanding of the world? It took many years of adventurous and sometimes dangerous exploration, better technology, and the willingness to change our beliefs.
Which brings me to the idea of: what do we think we “know” today that will be proven wrong tomorrow?
As a financial advisor I read quite a bit of financial-related material, and from time to time, I come across investment products that make some pretty bold claims, like incredible returns with no risk. When I come across these types of claims, I follow what has become known as the Sagan Standard, “Extraordinary Claims Require Extraordinary Evidence.” Carl Sagan, the famous astronomer, coined this aphorism, sometimes shortened to ECREE.
The next time you hear about an extraordinary claim, before blindly believing it, or taking action, you would be well served to remember ECREE.
As Mark Twain said, “It ain’t what you don’t know that gets you in trouble. It’s what you know for sure that just ain’t so.”
-Paul R. Rossi, CFA