The circle of competence is an idea that is espoused by the legendary value investor, Warren Buffett. Essentially, he encourages investors to stick to what they are good in and stay within that circle. Know what you don’t know and be better at what you know.

“You don’t have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital.” – Warren Buffett

This doesn’t mean that you should narrow your lens and only bother about what goes on in your own world. It is absolutely important to stay within your circle but there is no rule restricting you from expanding this circle. The idea is that you should have a firm understanding of the opportunity you have researched on before investing. That would