The author interviews some of the world’s best investors, many of whom you’ve heard of, but some you haven’t. The wit and wisdom of Buffett and Munger. The insights of Howard Marks. The simplicity of Joel Greenblatt. The energy of Sir John Templeton. I found Richer, Wiser, Happier to be full of great information, applicable to investing and life. Here are 10 nuggets of wisdom I gleaned from this book.
Howard Marks – “I’m convinced that everything that’s important in investing is counterintuitive, and everything that’s obvious is wrong.”
Ed Thorp – “Just because a lot of people say something is true, that doesn’t carry any particular weight with me. You need to do some independent thinking, especially about the important things, and try to work them out for yourself. Check the evidence. Check the basis of conventional beliefs.”
Amos Tversky – “It’s frightening to think that you might not know something, but more frightening to think that, by and large, the world is run by people who have faith that they know exactly what’s going on.”
- “We need to be perennially wary of anything that Wall Street is powerfully incentivized to sell.”
- “In a world that’s increasingly geared toward short-termism and instant gratification, a tremendous advantage can be gained by those who move consistently in the opposite direction.”
- “As pleasure-seeking creatures, we tend to be drawn to whatever feels good now, despite the price that we (or others) may have to pay later.”
- “The human brain is ill-equipped to make rational decisions. Our judgment is frequently torpedoed by emotions such as fear, greed, jealousy, and impatience; by prejudices that distort our perception of reality; by our susceptibility to serpentine sales pitches and peer pressure; and by our habit of acting on flawed or incomplete information.”
- “Acute stress and confusion can intensify an investor’s urge to follow the crowd and abandon independent thought…The desire to seek safety in numbers makes evolutionary sense” …but “herd behavior is often disastrous, driving them to buy during bubbles and sell during panics.”
- “Three things ruin people: drugs, liquor, and leverage.”
- “This maxim is a wise guide to a great and simple precaution in life: Never, ever, think about something else when you should be thinking about the power of incentives.”
Similar to a previous book review I did (Think Again), this book reminds us that to be different, you have to chart your own path. You can’t follow the crowd. The investors interviewed have certainly done so. Whether you’re a student of the top investment minds or you geek out over behavioral finance topics, this book won’t disappoint. There are some great life lessons included as well.
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