Quote for the Week
The hedge fund known as “Long Term Capital Management” collapsed, through overconfidence in its highly leveraged methods, despite IQs of its principals that must have averaged 160. Smart, hard-working people aren’t exempted from professional disasters from overconfidence. Often, they just go around in the more difficult voyages they choose, relying on their self-appraisals that they have superior talents and methods.
It is, of course, irritating that extra care in thinking is not all good but also introduces extra error. But most good things have undesired “side effects,” and thinking is no exception. The best defense is that of the best physicists, who systematically criticize themselves to an extreme degree, using a mindset described by Nobel Laureate Richard Feynman as follows: “The first principle is that you must not fool yourself and you’re the easiest person to fool.” — Charlie Munger (source)
From the Archives
Last Call
- Marks Memo: Mr. Market Miscalculates – Oaktree
- A Number From Today and A Story About Tomorrow – M. Housel
- Avoiding Bad Guys – Humble Dollar
- Ben Graham’s Shrewd Arbitrage Profit Changed His Life – Beyond Ben Graham
- The Corporate Life Cycle: Managing, Valuation and Investing Implications! – Musings on Markets
- Your Memories Are Like Paintings – Nautilus
- We All Live in Vegas Now – NY Times
- Online Sports Betting Hurts Consumers – Slow Boring
- Why Toilet Paper Keeps Getting Smaller and Smaller – The Hustle
- Are Athletes Born or Made? A New Study Reveals Which Fitness Traits Are Primarily Genetic – Outside