Here is the link of the article: https://fs.blog/2013/12/circle-of-competence/
Knowing your circle of competence enables you to avoid problems, identify opportunities for improvement, and learn from others.
Warren Buffett uses the concept of the circle of competence as a way to focus investors on the areas they knew the best.
Circle of Competence
Every person develops knowledge on certain areas through experience or study. Some areas are understood by most of us, whereas some of them require a lot more specialty to evaluate.
For example, understanding the economics of a restaurant involves renting or buying space, spending money to outfit the place and hiring employees.
However, understanding the working of, a microchip company or a biotic drug company cannot be developed by most of the people.
While investing, as Buffet says, we don’t necessarily need to understand specialized areas to invest. It is important to define what we know and to stick to those areas. Our circle of competence can be widened slowly overtime.
Charlie Munger took this concept outside of business. He said that, you have to figure out what your own aptitudes are. You cannot play games where other people have the aptitude and you don’t. This is because it is most likely that you will lose. You have to play your own circle of competence.
However, the goals must be attainable and the area within which you think you lie must be realistic. For example, being the best tennis player in the world is an unrealistic thing to start off. However, being the best plumber of a given area is a more achievable task. The key to improving your odds of success in life is by setting the correct and honest perimeter to operate within and to expand it slowly.
The Fundamental Mindset 