Learn Through the End of a Pencil
Build market intuition by manually tracking diverse data over time
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 6
- Confidence
- 99%
Learn Through the End of a Pencil is a deliberate-practice method associated with Dan Fuss. The investor casts a wide informational net and personally records commodities, bond prices, stocks, economic indicators, employment figures, auctions, and other relevant series. Manual charting or spreadsheet entry slows perception enough to encode movements and relationships more deeply than briefly viewing a prepared chart. Repetition creates a long historical record and helps the investor notice when apparently unrelated variables begin moving together. The resulting intuition is not treated as proof. Instead, an unusual feeling or pattern becomes a prompt to investigate an overlooked market, test a hypothesis, or focus research where others are not looking.
Origin
Dan Fuss charted market information by hand on green ledger paper and told Matt Egan, "I learned through the end of a pencil." Egan adapted the practice to spreadsheets.
Core principles
- 01Cast a wide net across markets and economic data
- 02Create the record yourself instead of passively viewing charts
- 03Track observations consistently over long periods
- 04Search for relationships among apparently unrelated variables
- 05Use intuition to direct further investigation, not to replace analysis
How to run it
- 1
Cast a wide net
Choose indicators spanning rates, credit, currencies, commodities, equities, auctions, employment, and economic activity.
Pro tip Include variables outside your immediate specialty to reveal cross-market connections.
Watch out A wide net should remain curated enough to update consistently.
- 2
Create the record yourself
Write observations by hand or enter them manually into a structured spreadsheet.
Pro tip Use a format that forces you to engage with each new value.
Watch out Copying an automated dashboard without attention defeats the exercise.
- 3
Update consistently
Record new data on a daily, weekly, or release-based schedule and preserve the history.
Pro tip Attach short notes explaining unusual movements or relevant events.
Watch out Irregular updates produce misleading gaps and weaken pattern memory.
- 4
Compare disparate series
Review the data for relationships, divergences, and changes that are not obvious when each market is viewed separately.
Pro tip Ask what common force could explain several simultaneous movements.
Watch out Correlation alone does not establish a causal relationship.
- 5
Listen to informed intuition
Notice when accumulated experience produces a sense that something beneath the surface has changed.
Pro tip Write down the intuition before investigating so hindsight cannot rewrite it.
Watch out Do not transact solely because of a feeling.
- 6
Investigate and test
Use research, historical comparisons, and contrary evidence to determine whether the perceived pattern represents an opportunity.
Pro tip Actively seek the strongest alternative explanation.
Watch out Pattern recognition can become apophenia without verification.
In the wild
An analyst manually tracks employment releases, commodity prices, credit spreads, and bond auctions. Several series weaken together even though headline growth remains strong. The analyst documents the divergence and investigates industries most exposed to slowing demand.
→ The process directs research toward a developing change before it becomes a consensus narrative.
A bond manager maintains years of auction data in a spreadsheet. Repeated entry makes unusual demand, tails, and dealer participation immediately noticeable. A surprising auction result prompts a review of duration and liquidity conditions.
→ Long practice converts raw auction statistics into an informed research signal.
Common mistakes
Only viewing prepared charts
Passive viewing is faster but may not produce the same attention, memory, or intuitive familiarity as creating the record.
Treating intuition as evidence
Intuition should determine where to investigate, not substitute for a validated investment thesis.
Tracking data without a routine
The method depends on repeated observation across time; sporadic entries provide little basis for pattern recognition.
Is it for you?
Best for
It is best for investors developing broad multisector awareness and a feel for relationships that standard dashboards may obscure.
Not ideal for
It is not ideal for people seeking immediate trading signals or a fully automated quantitative model.
From the transcript
“You're gonna be a better vestor if you can cast a wire net.”
“He said, I learned through the end of a pencil, okay.”
“what it does is it allows you to connect disparate spots and connect points that seem unconnected and then you see that they are connected”
From the episode
Fixed Income Credit Analyst to Bond Manager With Loomis Sayles