Humility and the World’s Dumbest Idea
Top 5 of the Week of October 10
In the Top 5 this week we take a look at Tren Griffin’s investing insights from “The Success Equation” by Michael Mauboussin for his own website, 25iq. Collaborative Fund’s Morgan Housel shares the most overlooked characteristic needed for investing success. And Anthony Isola, author of A Teachable Moment, uncovers the dumbest idea in the world with us.
A Wealth of Common Sense’s Ben Carlson examines how the activities on Wall Street are very different from 50 years ago. And Carl Richards of the Behaviour Gap blog writes how humility can keep us from making mistakes…
“Great Success Combines Skill With a lot of Luck”
- Few activities involve just luck, if you can throw the outcome of a game on purpose then skill is required to win it, if you cannot then the game is driven by luck alone
- But you cannot rely on one or the other alone; the two together are necessary to succeed—especially when it comes to investing
- More and more data is becoming widely available but the level of skill to interpret it is varying; if investors merely copy one another then any outcome will be luck derived only
What Do Great Investors Have in Common?
- Great investors are usually also great writers and effective communicaters; the ability to both understand and clearly convey data is an overlooked investing skill
- Other investors take faith in their skilled advice during rocky times because they reassure and offer dependability
- The capability to successfully manage investors should be appreciated as much, if not more, than the capability to manage a successful investment company
“Maximizing Shareholder Value Was the Dumbest Idea in the World”
- Cost-cutting to appease shareholders is often in the form of wages, investments, supplier costs, and employees
- Resulting in job losses, company finance deficit, broken vendor relationships, and irreparable damage to infrastructure
- And the cause of much anger at those leading the charge—corporate managers—to place shareholder value at a premium at the expense of all else
How the Investing Industry and Markets Have Changed in 50 Years
- The New York Stock Exchange trading volume has risen over 1,500 times; from $3 million in listed stocks a day to $5 billion
- The internet has changed the way investors make investing decisions; investment research is now shared globally within seconds by industry expert analysts
- 50 years ago, zero Chartered Financial Analysts worked on Wall Street; now there are 135,000, and a further 200,000 studying for the exams to become one
What do you believe is the biggest change in the investing world over the last 5 decades? Share your thoughts in the comments section below
Pride Can Be Dangerous, Humility Costs Nothing
- It’s dangerous to be too embarrassed to ask for more information when investing—asking questions could save you time and money in the long run
- When it comes to finances, there is no such thing as a dumb question
- Be humble and admit if you don’t know something; that humility will provide a “vital layer of protection” between you and potential mistakes
Top 5 of the Week is a summarized collection of financial investment articles that we like and think you might like too. Having written thousands of pages of equity strategy and company research between us, we understand the allure of the ever-changing world of finance. Investing is an art form – and like everything, something you can work on and improve at. There are some excellent writers out there on the finance web, some offer a running commentary on today’s market, some are doing research, some have tips on how to Become a Better Investor, and some just lift the cloud of fog behind a lot of financial jargon. Each week we will keep you up to date with the top 5 articles worthy of your attention.
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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article. The Become a Better Investor Team doesn’t necessarily endorse any stocks or shares mentioned in the articles or the author of such articles linked to and summarized in Top 5 of the Week and cannot guarantee the accuracy of its information.