Your behavior with money is oftentimes more important than how intelligent you are.
“Financial success is not a hard science, it’s a soft skill, where how you behave is more important than what you know”
Top 5 take away of “the psychology of money” by Morgan Housel.
1. Pay the price
Concentrated Portfolio has the price for having high returns
2. Never enough
We will not trade something that we have and need for something that we don’t have adn don’t need.
3. Crazy is in the eye of the beholder
4. Peek-a-boo
Black Swan
- An outlier
- An extreme impact
- Explainable after the fact
Interesting fact:
If you invested in the S&P 500 index 20 years ago, but you missed out on the 4 best performing stock market days, you have 164% return, instead of 291%.
5. Seduction of pessimism
The world is better than you think.
You are not going to get rich in the stock market without paying the price of volatility.