Jason Zweig wrote In much of life, doing things right over and over again is a sign of skill; expert musicians, for instance, rarely hit a wrong note. And the skill of one professional musician doesn’t make it harder for the others to be equally expert. But in the financial markets, where so many investors are highly skilled, their actions cancel each other out as they quickly bid up the prices of any bargains—paradoxically making luck the main factor that distinguishes one investor from another. And a streak of being right can make anyone forget how important luck is in determining the outcome.
I see a lot of Mr. Rights all around me, including people I thought were sensible and human enough to make mistakes. I see a lot of people (including yours truly) having made large doses of effortless money in recent times. And I see a lot of people often sliding into situations where they don’t want to waste time and effort using their brains to make sensible, intelligent investment decisions…because all they are looking at are happy, effortless, outcomes. You better use your brain, especially because you used it to earn your savings that you now want to invest, and especially now when we are passing through rapid and frequent bouts of irrationality.
P.S. A British neurophysicist has said that if we would have to approximate electronically an average human brain, it would cost three billion-billion dollars; that’s $3,000,000,000,000,000,000; and that’s 38,000 times the global GDP. You and I are fortunate to own one for free. Maybe, only when we remember this number that’s put to an average human brain, we may try to sometimes use it more rationally, especially while investing our savings during a bull market, and after having earned large doses of effortless money.
“Fortunes are made by buying right and holding on.” “Mr. Garrett’s first goal was to increase his capital in order to increase his power to help others. Having no children he was not heir-selfish. He decided the way to increase his savings fast enough to count at his age was to invest in a fast-growing […]
Leonard is an investor who uses “value as an analytical style” to buy businesses that sell software to vertical markets.- Mark Leonard Like Buffett, Leonard think about moats, uses return on invested capital as a touchstone, prefers concentrated investments to diversification and likes it when assets he wants to own for a long time “go on […]
When the word “Renaissance” is spoken, no one comes to mind faster than da Vinci. Not only was he the embodiment of an artist, but he was also a prolific inventor who contributed to everything from architecture and music to anatomy and geometry. He simply watched, noted, and contextualized things as he saw fit. It wasn’t like […]