“Mental freedom is the product of mastery in several areas of our lives. We must master ourselves, our relationships, and our money. Mastering one without the others (or some without one) will leave us subject to an undue external influence in the area(s) that remain which will keep us bound. Freedom isn't free, it takes a lot of hard work.”
“We often analogize our brains to computers – impartial storage apparatus tasked with housing and calling up information objectively. In reality, our brains are far more like beer goggles than supercomputers, which means that the intelligent investor must take precautions to ensure the emotion of the moment is not warping his sense of reality.”
Source: The Laws of Wealth: Psychology and the secret to investing success
“[The] more confidence an expert had, the worse his predictions tended to be and that the more famous an expert was, the worse her predictions were on average. Only in Wall Street Bizarro World would we expect confident experts to be stupid and famous thought leaders to be deserving of infamy.”
Source: The Laws of Wealth: Psychology and the secret to investing success
“The lessons for behavioral investors are unavoidable: you must automate your process wherever possible and avoid bias in the selection of people and processes. To do otherwise is to believe that professional money managers are actually above the fray of human bias, when the evidence shows us otherwise.”
Source: The Laws of Wealth: Psychology and the secret to investing success
“For there is always light,
If only we’re brave enough to see it.
If only we’re brave enough to be it.”
Source: Call Us What We Carry
“Let me say with all forthrightness that the [Rule-Based Behavioral Investing] model is not perfect and that some years following its principles won’t even beat a passive market cap weighted index. But what it does do is tilt the odds in your favor by consistently exploiting the psychological failings of your opponents in the market.”
Source: The Laws of Wealth: Psychology and the secret to investing success
“If you’re relying on your gut rather than a rule-based approach to investing, you can be almost certain that your feelings of risk or safety are exactly the opposite of what they ought to be.”
Source: The Laws of Wealth: Psychology and the secret to investing success
“Get rich fast and get poor fast are opposing sides of the same coin.”
Source: The Laws of Wealth: Psychology and the secret to investing success
“Intuition is the silent coming together of a lifetime of learning and must be cultivated if it is to be useful.”
Source: The Behavioral Investor: How psychology shapes wealth, risk, and investment decisions
“The behavioral investor understands and seeks to mimic the best parts of passive investing - low turnover, rock bottom fees and appropriate diversification - without succumbing to absentminded buying and selling.”
Source: The Behavioral Investor: How psychology shapes wealth, risk, and investment decisions