## Understanding the problem If we do not understand the problem we cannot solve it. In other words, when we try to do something, whether it be predicting the market, diversifying our portfolio, or making money, we are often not directly addressing the problem and just trying to find a temporary solution to a bigger problem that we do not see. ### Read the question carefully Sometimes the question is clear, sometimes it seems clear but it really isn't, so it is important to carefully read and understand the question. >"Understanding the problem" is not quite the same as understanding the question. >[[Problems for Puzzlebusters]], p.11 Technique of understanding problems by rephrasing the question. ### Analyze the question >Is it a yes/no question, or does it ask you to find something? Does it ask for an exact answer or an approximate one? Does it ask you to prove or disprove something? Does it ask for a discussion? What is the unknown? What conditions have to be satisfied? What information is given? Is there enough? Too much? Is the information reliable? >[[Problems for Puzzlebusters]], p.13 ## My Favorite Problem from Susquehanna >A car completes one lap of a 1-mile track and averages 30mph. How fast does it need to travel on the second lap to average 60mph over both laps? Most people blurt out 90mph. The word average diverts you to figuring out 30 + what averages 60 which is 90, but rephrasing the question reveals the real problem the question poses. >A car completes a 1-mile in 2 minutes. How fast does the car need to go on a second lap to complete both laps in 2 minutes. The answer is that it is not possible, because all the time was used in the first lap. ## Goal Seeking When thinking about trading and macro [[investing]] we often come up with various scenarios and goal seek for the best solution to optimize across the different potential outcomes we have modeled. This is solving the problem of diversifying across a sets of outcomes and risks, but it is not necessarily solving the problem of finding the best investment strategy. Similar to the race car question, the actual problem posed by the question of what to do in the markets is not necessarily the one we end up solving for. For Further Reading: [Moontower Brain Plug-In](https://notion.moontowermeta.com/moontower-brain-plug-in) | [Moontower Riddles & Puzzles](https://notion.moontowermeta.com/a-collection-of-math-riddlespuzzles) **Case Studies:** - [CHG Issue #52: Creative Problem Solving](https://cedarshillgroup.substack.com/p/chg-issue-52-creative-problem-solving) Tags: #seeds Your support for Cedars Hill Group is greatly appreciated <form action="https://www.paypal.com/donate" method="post" target="_top"> <input type="hidden" name="hosted_button_id" value="74PGN8ZXHQVHS" /> <input type="image" src="https://www.paypalobjects.com/en_US/i/btn/btn_donate_LG.gif" border="0" name="submit" title="PayPal - The safer, easier way to pay online!" alt="Donate with PayPal button" /> <img alt="" border="0" src="https://www.paypal.com/en_US/i/scr/pixel.gif" width="1" height="1" /> </form>