Favorite Reads, vol. 5

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The Psychology of Money by Morgan Housel

This story by Morgan Housel is worthy of its own attention.  Morgan discusses what it takes to be a successful investor...and it's not necessarily the most education, experience, or intelligence.  It's all about behavior.

"In what other field does someone with no education, no relevant experience, no resources, and no connections vastly outperform someone with the best education, the most relevant experiences, the best resources and the best connections?"

 

Podcast Pick

Motley Fool Money: Investing Misconceptions & Popsicle Hotlines

I enjoyed Morgan's article so much that I had to highlight this podcast alongside it.  In this episode, Morgan discusses his recent article, The Psychology of Money.  Here are a few excerpts.  It's truly 38 minutes of refreshing, thoughtful reflection on how behavior is perhaps more important than anything else in investing.

  • "Investing is not the study of finance, it’s the study of how people behave with money.”
  • "There's no amount of intelligence that can't be undone by poor emotions and poor behavior."
  • "What I mean by behavior is your relationship with greed and fear. Your ability to take a long-term view. Your ability to react to market ups and downs with a sense of calm and a sense of not taking things too seriously, not getting too overwhelmed by greed, not getting too knocked down by fear."
  • "You don't need a lot of book intelligence to do well in investing if you master the behavior."

 

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