A Circle of Competence for Generalists?

In a 1996 letter to Berkshire Hathaway shareholders, Warren Buffet wrote the following:

"Should you choose, however, to construct your own portfolio, there  are a few thoughts worth remembering.  Intelligent investing is not  complex, though that is far from saying that it is easy.  What an  investor needs is the ability to correctly evaluate selected businesses.  Note that word "selected":  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."

When I first read this, I thought I understood the point Buffet was trying to make, but I also found it to be incompatible with my own personal experience as a self-professed generalist. Put simply, most of my career success has been a result of a combining a broad set of skills to produce a specific output (i.e. - building product with a marketing/engineering mindset). Scott Adams calls this talent stacking.

At the time, I thought Buffet was arguing for deep specialization, essentially becoming world-class in a very specific area and focusing all energy on mastering it.

But....

I'd like to have a broad set of skills and knowledge, so how does that fit into this notion of having a circle of competence? Buffet and Munger are voracious readers, consuming books in a variety of domains; are they not taking their own advice?

Shouldn't they be specializing and digging deep into their own circle of competence (i.e. - investing in businesses)? Why are they reading books on philosophy and physics instead?

Context Matters:

I think the context matters - the notion of a circle of competence is discussed as part of the investing process, which is dictated by market forces. If you want to produce a superior return, you need to stick to what you're amazing at (a circle of competence), as it creates unique differentiation vs. other investors (or people in the market). This can apply to your career as well as investing.

If you are world-class at a particular subject, this doesn't mean you should avoid learning new things in different areas, but what you should do is not expect to achieve superior "returns". You are reverting to a mean when you step outside your circle of competence and you shouldn't expect to see superior results.

Here's a real world scenario - last Summer I purchased a home and renovated it. Overall, I did some things right, and made a few mistakes. I ended up selling the home about nine months later and lost a little bit of money (but not nearly as much as I could have). The reality is that I'm not a real-estate genius. I'm a dude who works in software and online marketing.

I was outside my circle of competence.

Do I regret my house-buying decision? In a financial sense, yes.

In a life-skills sense, not at all. I learned a lot and will make better decisions in the future. When making this decision, I should have fully embraced the reality that I was outside my circle of competence and should expect an average outcome as a result.