MY AMAZON Review Of The Psychology Of Money
I love browsing books in offline book stores . When I saw this book cover I guffawed . How corny a cover - the brain ! How cheesy a title - The Psychology Of Money ! I picked it up ready to tear it to shreds in my mind . After all I had been reading books on money since my childhood & am a mutual fund & investments veteran through a long career there . I had read the extremely entertaining though functionally useless books of Peter Lynch - a con man who sold millions of books about active investing & after retiring confessed that active fund management was bogus , Economic textbooks by various authors including the legendary one by Paul Samuelson , The best book in the world to understand equity investing - A Random Walk Down Wall Street by Burton Malkiel , Excellent books by the genius - though an overrated one - Taleb & even out & out poppycock books like The Secret - which sold in its millions to uneducated people looking for a quick fix to getting rich .
I immediately overcame my bias about this book - Thank you Kahneman for proving that plenty of biases are dangerous - after checking out a few pages & bought it ASAP
Hats off to Morgan for 3 feats
1 ) Handling so many concepts so well in one book
2 ) Expressing old concepts in refreshing ways that drive those concepts in deeper & prompt action
&
3 ) Showing us some lesser known concepts in an exhilarating way
Here is one example of a concept that I absorbed very well when I was 27 years old but was moved to take even more seriously today by the rivetting way in which it was written
If Warren Buffet - who started investing at 10 - was a more regular guy , started investing at 30 with $ 25,000 & got a CAGR of 22 % ( His real return delivered on the Berkshire Hathaway stock ) his networth today would have been :
$ 11 . 9 MILLION
His actual networth today ? Hold your breath ! :
$ 84 . 5 BILLION
Conclusions :
1 ) His networth would have been lower by 99.9 % would he have led a more typical life
2 ) His skill is investing but his secret is time - something that even the poorest person has
Lessons :
1 ) Start early 2 ) Stay invested 3 ) Never take your eyes off the ball till you die
In short after investing SHUT UP & WAIT
This story blasted my brain cells more than several excellent excel sheets I had seen about the same theory several years ago
There are several such amazing bits of investing strategy & philosophy in this book
Hence I recommend this book to anyone who can read . It may turn out to be your life's best book
I really like it whenever people come together and share thoughts. Great post, keep it up.
ReplyDeletenewcastle mental health services
I've completely enjoyed reading this specific post, which in fact explains everything. It is a highly engaging and useful piece of writing. I appreciate it, and I wish you luck with the forthcoming pieces. erp customization
ReplyDelete