Excess Returns 13 – The Intelligent Investor

Excess Returns

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2 Responses

  1. Avatar Bryan Matthew says:

    A very thoughtful piece Mike and I think we need more thought provoking articles like this one.

    The thing that has often struck me when meeting successful investors has been their emotional detachment to such a degree that they often come over as quite cold, removed and lacking compassion.

    I wonder sometimes if that is a price worth paying and it reminds me of ‘A Christmas Carol’ and Scrooge’s lack of compassion for his fellow man as his ‘Business’ motivates him- if people are suffering then “they had better do it (die) and decrease the surplus population”, but in his epiphany he finally realises that “the common welfare was my business; charity, mercy, forbearance, and benevolence were all my business…”.

    I also find it interesting when you remark that you have had little success in having your advice accepted by friends and relatives- I think this is when a true soft skill as emotional intelligence comes in handy.

    I think that quite often, we investors can live in an investment ‘bubble’ and lose touch with what the common man or woman knows about savings and investment- which in truth is probably not much, and I have found that you need to use that emotional intelligence to better understand people and how they operate to effectively explain to them our ideas.

    They would know little if anything about an OEIC or an ETF and we need to speak to them in their own language rather than our own.

    Interesting stuff still!

    • Mike Rawson Mike Rawson says:

      Thanks for the detailed comment, Brian.

      I agree with about a certain level of detachment being common amongst investors, but I don’t see it as a bad thing – it helps you to distinguish reality from spin. I’d rather be detached than like the rest.

      Not do I see my inability to bring people with me on my investment journey as a failing on my part. I think there will only ever be a minority of people who look to the future.

      I see it more as their loss in not having taking advantage of an accessible and free resource. And trust me, I have used their language. “You will be eating cat food when you are 70” has no effect on most people. They’d rather have an iPhone and a holiday.

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Excess Returns 13 – The Intelligent Investor

by Mike Rawson time to read: 8 min
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Excess Returns 12 – Risk Management

Today’s post is the penultimate article in our long series on the book Excess Returns, and looks at risk management.