Judgment Is the Asset

The line is from Naval Ravikant’s 2019 talk “Judgment Is the Decisive Skill,” published on his site. Leverage, in his usage, is anything that multiplies the output of one decision: money, people working for you, or code and media that copy at almost no cost. The newest kind needs no one’s permission and has no marginal cost to reproduce, so a single person’s decision can now reach millions, and a multiplier that large works on a wrong call as readily as a right one.

With little leverage, output tracks effort, and the way to make more is to work more. Multiply a decision a millionfold and the hours behind it stop mattering next to whether it was the right decision; effort becomes the cheap input and judgment the scarce one. Naval’s example is Warren Buffett, whose fortune is judgment applied through capital. Take the money away, he says, and investors would hand it straight back, because the capital was never the rare part. Knowing which long-term bet would pay off was.