12 things I learned from Morgan
Housel: Part 10
10.
“Investing is overwhelmingly a game of psychology.”
“Almost invariably the best investors are the people who
have control over their emotions.”
Most
mistakes in investing are psychological or emotional in nature. Being rational
about investing is a task that has no finish line – it is a constant struggle
for any human to be rational. It is harder for some people to be rational than
others, but everyone is not rational at times. My post on Daniel Kahneman and James Montier examine this in greater depth. Housel elaborates: “Investing is very complicated. It’s an interaction of
psychology and math and history and politics, and it’s all just mushed together
and it’s really complicated. It’s always more complicated than we think
it is. My journey has been one towards growing gradually more humble over
the years. I would say each year that goes by, I realize that I know less
and less.”
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