I hear and I forget. I see and I remember. I do and I understand - Confucius There are three methods to gaining wisdom. The first is reflection, which is the noblest. The second is imitation, which is the easiest. The third is experience, which is the bitterest. – Confucius Above are 2 quotes from Confucius to act as my backdrop for my post today. What is the difference between Knowledge versus Competence? If you take someone relatively new to the stock market and give him/her a pop quiz on stock market terminologies – be it fundamental or technical – I bet he/she will score highly in this quiz! If we repeat the same quiz on old-timers in the stock market, they will not score too highly as their answers probably don’t fit the “standard” answers… Why? These veterans would have “internalized” or “adapted” the theories and terminologies to reflect their real life experience; while rejecting those that don’t work. As newbie, we do what we have been taught in school – quote famous people and sayings to “score” points in exams – forgetting this is not how it works in the stock market... (Hey! I just quoted 2 sayings from Confucius. Ouch!) Knowledge is WHAT we KNOW. Competence is HOW to DO IT. It’s quite fashionable these days to see investors/traders giving themselves (including me) titles: I am a value investor. I am a dividend investor. I am a growth investor. I am a day trader. I am a swing trader. Blah, blah, blah. But what we all really want to be is a MONEY MAKING investor/trader! And we all know that takes competence (how to make money); not book knowledge (what we know). No incantations or invoking of gurus’ names (but boy it sure impress people!) would help us in our competence development if we don’t: 1)     Act independently 2)     Experience the reality ourselves 3)     Reflect on the outcome ourselves Please don’t steal the reflections of gurus as your own. Don’t believe? Just ask those self-declared disciples of Warren Buffet and ask how much they have made so far… You can easily substitute Warren Buffet with any famous guru – be it Peter Lynch, George Soros, Jim Rogers, etc. Ask and run away! You may also want to take a peek at my previous post:  Are you the Opinion leader or Follower? Be a first rate you! Not a 2^nd rate or 3^rd rate Warren Buffet. Be yourself! Stand tall, walk straight. Singapore Man of Leisure (welcome to my blog; just google it!) This post was written by a guest contributor. Please see their details in the post above. If you'd like to guest post for TheFinance.sg, feel free to contact me for details about how YOU can share your tips and knowledge with our community.