History is full of organisations that looked unstoppable until they suddenly weren’t. Empires, companies, armies. One moment they are dominant, the next they are sliding down the mountain.
Why does that keep happening?
A clue comes from a line written by the Greek poet Archilochus: “The fox knows many things, but the hedgehog knows one big thing.”
The philosopher Isaiah Berlin later used the idea to describe two kinds of thinkers. Hedgehogs organise the world around one powerful idea, foxes draw insights from many places.
Psychologist Philip Tetlock tested this distinction by studying more than 20,000 predictions made by political experts.
Foxes were more accurate.
They pulled information from multiple sources and were more willing to change their minds. Hedgehogs were more confident, which is why they tended to appear more often on television.
But historian John Lewis Gaddis argues the real skill isn’t choosing between the two, it’s knowing when to switch.
When trying to understand the world great leaders behave like foxes, when it is time to act they become hedgehogs.
Investing works in much the same way.
Understanding markets requires fox thinking - curiosity, multiple perspectives, a willingness to adapt.
But a financial plan requires hedgehog thinking - a clear strategy and the discipline to stick with it.
The problem usually isn’t choosing one. It’s getting stuck in it.