September 16, 2019

The few immutable truths of finance – the stuff no one argues about by Morgan Housel

The few immutable truths of finance – the stuff no one argues about because there are right answers – are what matter most. But we hear about them the least, specifically because no one argues about them.

Spend most of your time contextualizing those truths within your own goals, needs and experiences, realizing that it’s OK if others disagree with your views and you disagree with theirs.

When you watch, listen, and read about other people’s views, the most important takeaways are insights into how people deal with risk and uncertainty, because those are the broad lessons that are likely to apply to the greatest number of people, including yourself.

Learning from others is a huge part of investing – every mistake has already been made and you can add years to your life learning from them vicariously. But most investment debates can and should be replaced by acknowledging that reasonable people can disagree because we’re all different and driven by things that are hard to quantify. The fun part of behavioral finance is learning about how flawed other people can be. The hard part is trying to figure out how flawed you are, and what makes sense to you but would seem crazy to others.


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