Quote for the Week
The money doesn’t go to the people with the highest I.Q. There would be a very poor correlation between I.Q. and investing and results. And you say to yourself why does somebody with a 500-horsepower motor only get 100-horsepower out of it? And I would say that if you look at the intellect as being the horsepower that’s available, but you look at the output as reflecting the efficiency of that motor, it is rationality that causes the capacity to be translated in output.
Now what interferes with rationality? It’s ego. It’s greed. It’s envy. It’s fear. It’s mindless imitation of other people. I mean, there are a variety of factors that cause that horsepower of the mind to get diminished dramatically before the output turns out. And I would say if Charlie and I have any advantage it’s not because we’re so smart, it is because we’re rational and we very seldom let extraneous factors interfere with our thoughts. We don’t let other people’s opinion interfere with it. We don’t get– we try to get fearful when others are greedy. We try to get greedy when others are fearful. We try to avoid any kind of imitation of other people’s behavior. And those are the factors that cause smart people to get bad results. — Warren Buffett (source)
From the Archives
Last Call
- Buffett’s Bet of the Century – R. Wigglesworth
- Bad Idea: Following the Crowd Into the Most Popular Types of Funds – J. Ptak
- What Higher Inflation Means for Stock/Bond Correlations – A. Arnott
- Suffering in Private – HumbleDollar
- This Post Will Change Your Life – Klement on Investing
- Predictions aren’t Always About the Future – T. Harford
- 5 Key Insights for Better Decision Making from Nuala Walsh – B. Baranowski
- Why Do Large Language Models Hallucinate? – Marcus on AI
- How the US Built 5,000 Ships in WWII – Construction Physics
- John Cleese on ‘Holy Grail’ at 50 – Hollywood Reporter