DFN: Really good column on investing lessons from Michael Mauboussin, Charlie Munger, Marty Whitman, Jesse Livermore and Sir John Templeton. Particularly difficult to sit still and do nothing.
5 Lessons From 5 Smart Investors
By Morgan Housel
April 27, 2010
"And why the hell should I listen to you, some random girl named Morgan Housel?"
A special thanks to the reader who emailed me this fine note (I’m male, by the way). They bring up a great point: There’s a lot of information, and even more ill-informed opinions, sloshing around out there. Choose whom you take advice from wisely.
I remember this problem vividly when I first began learning about investing and economics. It was frustrating beyond belief to take someone at their word, only to later learn they were either certifiably clueless or fringe lunatics.
The best way to circumvent this is to pay special attention to advice given by those who are demonstrably successful at what they do. That’s pretty obvious. And finding these teachers is fairly easy in investing: Annual returns provide a universal yardstick that objectively distinguishes the truly great from the merely good from the average from the bad.
So here are five bits of timeless advice given by five investors who have proven to be among the greats.
1. "A thoughtful investment process contemplates both probability and payoffs and carefully considers where the consensus — as revealed by a price — may be wrong."