Mar 11, 2019
These are times of
financial and economic turmoil.
With the current uncertainty and
many changes on the horizon, it’s time to go back to the big
picture.
In today’s episode, I’ll be
discussing 24 things all investors and entrepreneurs should
understand about the way property investing and the economy
work.
A favourite columnist of mine,
Morgan Housel, wrote a great column about 122 things everyone
should know about investing and the economy. I’m joined today by
Ahmad Imam, and we’re going to talk about 24 of those big picture
ideas that everyone should understand about investing and the
economy.
- Saying “I’ll be greedy when
others are fearful” is easier than actually doing it.
- When most people say they want to be a
millionaire, what they really mean is “I want to spend $1 million,”
which is literally the opposite of being a
millionaire.
- Daniel Kahneman’s
book Thinking Fast
and Slow begins,
“The premise of this book is that it is easier to recognize other
people’s mistakes than your own.” This should be every market
commentator’s motto.
- As
Erik Falkenstein says: “In expert tennis, 80% of the points are
won, while in amateur tennis, 80% are lost. The same is true for
wrestling, chess, and investing: Beginners should focus on avoiding
mistakes, experts on making great moves.”
- There is a difference between, “He
predicted the crash of 2008,” and “He predicted crashes, one of
which happened to occur in 2008.” It’s important to know the
difference when praising investors.
- Wealth is relative. As
comedian Chris Rock said, “If Bill Gates woke up with Oprah’s money
he’d jump out the window.”
- The Financial Times wrote, “In 2008 the three most admired
personalities in sport were probably Tiger Woods, Lance Armstrong
and Oscar Pistorius.”
The
same falls from grace happen in investing. Choose your role models
carefully.
- Investor Nick Murray once said, “Timing the
market is a fool’s game, whereas time in the market is your
greatest natural advantage.” Remember this the next time you’re
compelled to cash out.
- Jason Zweig writes,
“The advice that sounds the best in the short run is always the
most dangerous in the long run.”
- Billionaire investor Ray Dalio once said, “The
more you think you know, the more closed-minded you’ll be.” Repeat
this line to yourself the next time you’re certain of
something.
- John
Reed once wrote, “When you first start to study a field, it seems
like you have to memorize a zillion things. You don’t. What you
need is to identify the core principles — generally three to twelve
of them — that govern the field. The million things you thought you
had to memorize are simply various combinations of the core
principles.” Keep that in mind when getting frustrated over
complicated financial formulas.
- James Grant says, “Successful
investing is about having people agree with you …
later.”
- Scott
Adams writes, “A person with a flexible schedule and average
resources will
be
happier than a rich person who has everything except a flexible
schedule. Step one in your search for happiness is to continually
work toward having control of your schedule.”
- Investors want to believe in someone.
Forecasters want to earn a living. One of those groups is going to
be disappointed. I think you know which.
- As the saying goes, “Save a
little bit of money each month, and at the end of the year you’ll
be surprised at how little you still have.”
- John Maynard Keynes once wrote, “It is
safer to be a speculator than an investor in the sense that a
speculator is one who runs risks of which he is aware and an
investor is one who runs risks of which he is unaware.”
- Our
memories of financial history seem to extend about a decade back.
“Time heals all wounds,” the saying goes. It also erases many
important lessons.
- You are under no obligation
to read or watch financial news. If you do, you are under no
obligation to take any of it seriously.
- Most
economic news that we think is important doesn’t matter in the long
run. Derek Thompson of The Atlantic once wrote, “I’ve written hundreds of
articles about the economy in the last two years. But I think I can
reduce those thousands of words to one
sentence. Things
got better, slowly.”
- The “evidence is unequivocal,” Daniel
Kahneman writes, “there’s a great deal more luck than skill in
people getting very rich.”
- There
is a strong correlation between knowledge and humility. The best
investors realize how little they know.
- Not a single person in the
world knows what the market will do in the short run.
- The
more someone is on TV, the less likely his or her predictions are
to come true.
- How long you stay invested for will
likely be the single most important factor determining how well you
do at investing.
Links and Resources:
Michael Yardney
Metropole Property Strategists
Ahmad Imam – Director Metropole Sydney
National Property and Economic Market Update 1
day Trainings use the coupon code:
PODCAST
122 Things Everyone Should Know
About Investing and the Economy by Morgan Housel
Some of our favourite quotes from the
show:
”As rational people, we often act very
irrationally when it comes to money.” –Michael Yardney
“Don’t compare your life with
the highlight reel that people put on Facebook and Instagram.”
–Michael Yardney
“Those people who are prepared
to take action today, in five years’ time or ten years’ time are
going to look smart.” –Michael Yardney
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