"Land Never Loses Value"

A lesson in thinking Vs. Reasoning

I recently re-watched Wode Maya’s interview of Ugandan businessman Hamis Kiggundu. See linked below for your listening pleasure;

https://www.youtube.com/watch?v=npFBO7JkYtE&t=946s

Regardless of what one thinks of Ham’s business journey or his views, one idea stayed with me long after the interview ended. He kept returning to one word: Reason.

In the first instance it’s easy to think he is simply talking about entrepreneurship, but you quickly realize that he was pointing to something much deeper, something that applies to virtually all of our endeavors; investing, business, leadership, and even the way we live our lives.

As someone who has spent years advising individuals and institutions on investments and risk matters, I’ve come to believe that one of the biggest mistakes we make is assuming that thinking and reasoning are the same thing. They aren’t and the difference matters more than it sounds.

Thinking is something we all do almost constantly. We think while scrolling through X or WhatsApp. We think while listening to political debates or discussing the economy. Thinking includes imagining, remembering, worrying, hoping, arguing, and forming opinions.

Reasoning is different, its narrower and harder. Reasoning is disciplined thinking. It is the deliberate process of examining evidence, questioning assumptions, weighing probabilities, and allowing conclusions to emerge from reality rather than emotion.

I see this distinction play out daily in my own work. I consume enormous amounts of information; interest rate decisions, inflation data, exchange rate movements, corporate earnings, regulatory and policy announcements, geopolitical events. Reading all of that is thinking. Reasoning only starts when I ask: What does this actually mean? What assumptions am I making? What evidence contradicts my view? What is the market already expecting? What happens if I’m wrong?

Most people often assume that finance and investment professionals are paid to predict the future. We’re not. The best investment decisions rarely come from certainty, but rather from reasoning well under uncertainty.

This gap between thinking and reasoning shows up just as clearly outside of professional circles, and in the “markets”. One thing I’ve noticed about us as Ugandans is that we’re wonderfully opinionated. Spend a couple of minutes in a taxi, a trading center, a restaurant, or a family gathering, and someone will confidently explain why the shilling is weakening, why fuel prices are rising, or why government made a particular decision. Sometimes those explanations are correct. More often, we’ve simply accepted the first story that sounded convincing. Whereas our minds love stories, reasoning on the other hand demands evidence.

Take one investment almost every Ugandan understands: land. For years we’ve heard the phrase, “Land never loses value.” In many cases, that statement has appeared true. But reasoning asks different questions. Why has land appreciated? Will those same drivers continue? Is every piece of land equally valuable? How long would it take to sell if you urgently needed cash? What return does it generate while you own it? Can two people buy land at different prices and have completely different investment outcomes?

These are reasoning questions. Without them, we risk mistaking a popular belief for sound analysis. Sometimes we reach the right conclusion for the wrong reasons which ironically are often the most dangerous decisions because success ends up reinforcing poor thinking.

One lesson my career, and the CFA Program have reinforced is intellectual humility, which encourages disciplined reasoning. For example, knowing that financial markets punish certainty, yet no amount of experience eliminates uncertainty. No financial model captures every variable, and no investor wins every time. The objective is therefore not to be right all the time, but to make decisions using a process that remains sound even when the outcome isn’t. This is also the core of what good risk management really is: not predicting every storm but building a ship that can survive one.

This lesson extends well beyond finance the more you think about it. We see the same pattern everywhere; in politics, business, relationships, and social media. We consume more information than any generation before us, yet good judgment often feels increasingly rare. Perhaps that’s because information alone doesn’t improve decision-making. Reasoning does.

Reasoning forces us to ask uncomfortable questions, challenge ideas we already agree with and demands that we separate facts from narratives, probability from certainty, and conviction from ego. It takes effort, but it is effort worth making.

Looking back, I think that’s what Hamis Kiggundu was trying to communicate when he spoke so passionately about reason. Whether you agree with all of his conclusions is almost beside the point. The principle itself is timeless.

Thinking is automatic, Reasoning is intentional. Thinking generates opinions. Reasoning generates judgment.

As investors, risk managers, business leaders, and citizens, we will all continue to think. The question is whether we will also reason. In the end, our success in our various endeavors, and especially the quality of our lives depends far less on how much we think, and far more on how well we reason.

Jean A.

PS: This article is for educational purposes and does not constitute financial or investment advice. Please consult a qualified financial adviser before making investment decisions.