Analogies between chess and investing are somewhat frequent. What those usually fails to address is that the chess game is a closed-end system (masters usually memorize thousands of game set-ups like an algorithm so they can outplay opponents), while investments analysts and investors are required to constantly assess the ever-changing business environment. Taking a step back, sometimes the definition of what the business environment is not that linear. At the end of the day, it’s like investing is a matter of perspective and framing, not data collection and processing per se.
Additionally, it’s worth emphasizing what Heuer put brilliantly when he addressed the downside of mental models: it’s the principal source of inertia in recognizing and adapting to a changing environment.
There is a crucial difference between the chess master and the master intelligence analyst. Although the chess master faces a different opponent in each match, the environment in which each contest takes place remains stable and unchanging: the permissible moves of the diverse pieces are rigidly determined, and the rules cannot be changed without the master’s knowledge. Once the chess master develops an accurate schema, there is no need to change it. The intelligence analyst, however, must cope with a rapidly changing world. (…) Schemata that were valid yesterday may no longer be functional tomorrow.
Learning new schemata often requires the unlearning of existing ones, and this is exceedingly difficult. It is always easier to learn a new habit than to unlearn an old one. Schemata in long-term memory that are so essential to effective analysis are also the principal source of inertia in recognizing and adapting to a changing environment.
From Psychology of Intelligence Analysis; Richard Heuer