Had a short trip with lots of delays, which allowed me to burn through @michaelbatnick’s new book “Big Mistakes.” It’s a great read. Here are my top highlights/notes. Quotes are his. Rest is mine.
amazon.com/Big-Mistakes-I…
amazon.com/Big-Mistakes-I…
“From 1929 to the bottom in 1932, (Ben) Graham lost 70%. If such a careful and thoughtful analyst can lose 70% of his money…”
An investor without major losses is a liar or inexperienced. Either is suboptimal.
An investor without major losses is a liar or inexperienced. Either is suboptimal.
“No one can make big money on what someone else tells him to do.” -Jesse Livermore
Mirroring action provides zero understanding. You can't know when the music stopped if you never heard the song.
Mirroring action provides zero understanding. You can't know when the music stopped if you never heard the song.
“The mistake family is so large that there is always one of them around.” -Jesse Livermore
Wisdom is never complete. Humility is always warranted.
Wisdom is never complete. Humility is always warranted.
“It is strange the way the ignorant and inexperienced so often and so undeservedly succeed when the informed and the experienced fail.” -Mark Twain
Luck matters. But no one “deserves” success and life has a way of humbling those who mistakenly believe otherwise.
Luck matters. But no one “deserves” success and life has a way of humbling those who mistakenly believe otherwise.
“Isaac Newton actually was one of the smartest people to ever walk the earth, and not even he was able to resist the sight of other people getting rich without him.”
Envy is often correlated with IQ, net worth, and comfort. Success triggers comparison. No one ever "arrives."
Envy is often correlated with IQ, net worth, and comfort. Success triggers comparison. No one ever "arrives."
“Intelligence in investing is not absolute; it’s relative. It doesn’t just matter how smart you are, it matters how smart your competition is.”
Find low bars to jump over and learn how to pole vault.
Find low bars to jump over and learn how to pole vault.
“Putting too much money into something you don’t fully understand is a good way to lose a lot of money.”
If you can’t clearly see the board, or don’t understand the rules, don’t play the game.
If you can’t clearly see the board, or don’t understand the rules, don’t play the game.
“Our satisfaction with our views of the world is part of our self-esteem and personal identity.” -Robert Shiller
Intellectual honesty starts with holding cherished ideas loosely.
Intellectual honesty starts with holding cherished ideas loosely.
“The stock market is the only market where things go on sale and all the customers run out of the store.” -@cullenroche
Behavior and interests often diverge, especially when herds and money are involved.
Behavior and interests often diverge, especially when herds and money are involved.
“Concentrate to get rich, diversify to stay rich.”
A diversity of circumstances make the market. Find counter-parties with divergent motivations.
A diversity of circumstances make the market. Find counter-parties with divergent motivations.
“Serotonin plus adrenaline plus different time horizons times a few million participants equals literally nobody knows.”
Patterns are rarely predictive. Overfit the curve at great peril.
/fin
Patterns are rarely predictive. Overfit the curve at great peril.
/fin
