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The Psychology of Money
Old 09-15-2018, 01:09 PM   #1
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The Psychology of Money

Here’s a link to and some of my favorite quotes from a fantastic article by Morgan Housel. (Thx to Mike Piper for the link in his weekly “Oblivious Investor” email.). It’s a bit long but, worth the read IMO.

ETA: My main take-away was that we should remain humble, have margin for error & play the long game.

https://www.collaborativefund.com/bl...logy-of-money/

Quotes:

“...investing is not the study of finance. It’s the study of how people behave with money.”

“Good investing isn’t necessarily about earning the highest returns, because the highest returns tend to be one-off hits that kill your confidence when they end. It’s about earning pretty good returns that you can stick with for a long period of time. That’s when compounding runs wild.”

“Real contrarianism is when your views are so uncomfortable and belittled that they cause you to second guess whether they’re right. Very few people can do that. But of course that’s the case. Most people can’t be contrarian, by definition. Embrace with both hands that, statistically, you are one of those people.”

“But room for error is underappreciated and misunderstood....Room for error lets you endure, and endurance lets you stick around long enough to let the odds of benefiting from a low-probability outcome fall in your favor.”

“A stable strategy designed to endure change is almost always superior to one that attempts to guard against whatever just happened happening again.”
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Old 09-15-2018, 02:53 PM   #2
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Great article! I really enjoyed it..Thanks for sharing
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Old 09-15-2018, 04:09 PM   #3
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Great article! I really enjoyed it..Thanks for sharing
+1
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Old 09-15-2018, 04:28 PM   #4
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Great article! I really enjoyed it..Thanks for sharing
+1, ditto, squared and in spades, one of the best articles about money I've read recently. Thanks for the post.
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Old 09-15-2018, 05:26 PM   #5
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Yup, makes a lot of sense.
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Old 09-15-2018, 06:53 PM   #6
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Originally Posted by Huston55 View Post
“Real contrarianism is when your views are so uncomfortable and belittled that they cause you to second guess whether they’re right. Very few people can do that. But of course that’s the case. Most people can’t be contrarian, by definition. Embrace with both hands that, statistically, you are one of those people.”
When does a contrarian become a nutcase?
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Old 09-15-2018, 06:55 PM   #7
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When does a contrarian become a nutcase?
I think the fact that you can ask that question means you haven’t yet crossed over the line.
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Old 09-15-2018, 06:59 PM   #8
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When he always walks when the "don't walk" signal is on and becomes a danger to himself and society.
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Old 09-15-2018, 07:31 PM   #9
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Yes, thanks for sharing. I liked this part.....

"There are three parts to this:

You see a lot of information in the world.

You can’t process all of it. So you have to filter.

You only filter in the information that meshes with the way you think the world should work.

Since everyone wants to explain what they see and how the world works with clean narratives, inconsistencies between what we think should happen and what actually happens are buried."

As a consequence, I suppose, that you'll be you and I'll be me and the article probably won't change many.
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Old 09-15-2018, 08:39 PM   #10
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When does a contrarian become a nutcase?

when you don't care about your detractors ,
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Old 09-16-2018, 06:52 AM   #11
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Huston55:

Great Article - Thank you !

Rich
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Old 09-16-2018, 09:17 AM   #12
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+1 from me
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Old 09-16-2018, 12:17 PM   #13
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Good article. Thanks!
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Old 09-16-2018, 01:21 PM   #14
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Excellent article. I feel that my whole life has been an attempt to reach the point where I can say 'I don't mind what happens." It has a been a long struggle, but I think I'm getting close.
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Old 09-16-2018, 03:41 PM   #15
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“When compounding runs wild.” What a lovely phrase. May I get there someday and be young enough to enjoy it.
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Old 09-16-2018, 09:22 PM   #16
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Good article--thanks for posting.
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Old 09-16-2018, 09:40 PM   #17
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I don't mind what happens, I never did. Even when I had nothing.

Always keep investing.

Until now of course. Now it's time to Blow That Dough!
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Old 09-16-2018, 11:02 PM   #18
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Great read
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Old 09-17-2018, 09:30 AM   #19
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At w*rk. I’ll read it when I get home. Can’t wait ��!
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Old 09-17-2018, 10:33 AM   #20
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Excellent article. I passed it along to many people that I think would benefit from the insight.

Thanks for sharing!
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