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Investment Aphorisms That Apply to Life
by Susan Dunn, MA Clinical Psychology, The EQ Coach "Warren Buffett says he's 'disgusted' by corporate bosses who tout their companies while selling shares: 'These business leaders view shareholders as patsies, not partners.' Buffett has never sold a share of Berkshire Hathaway. [Forbes.com] How are you treating the "shareholders" in your life? "In investing, rely on the ordinary virtues that intelligent, balanced human beings have relied on for centuries: common sense, thrift, realistic expectations, patience, and perseverance." [John Bogle] How are you doing on these ordinary virtues? "The easiest and surest way for a fund to achieve the top quartile in investment performance among peer funds is to achieve the bottom quartile in expenses." [John Bogle] What's your debt to earning ratio in your life? "The Prussian General Clausewitz has said, 'The greatest enemy of a good plan is the dream of a perfect plan.' And I believe that an index strategy is a good strategy. But many of you . seek a better plan, if not a perfect plan, no matter how great the challenge, no matter how overpowering the odds against implementing it with extraordinary success." [John Bogle] Is your perfectionism getting in the way of living and enjoying your life? "...[A]n extra percentage point of standard deviation (a rough proxy indeed for the elusive concept of risk) is meaningless, while an extra percentage point of long-term return is priceless." [John Bogle] Have you figured out what matters and are you paying attention to that? "To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What's needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework." [Warren Buffett] How's your EQ, i.e., a sound intellectual framework for making decisions and the ability to keep emotion is from corroding that framework? "By periodically investing in an index fund, for example, the know-nothing investor can actually out-perform most investment professionals. Paradoxically, when 'dumb' money acknowledges its limitations, it ceases to be dumb." [Warren Buffet] Are you conscious? If you act with Intentionality, then you aren't "dumb?" "If you take money out of your left pocket and put it in your right pocket, you're no richer. Reporters would say, you mean they gave you guys a Nobel Prize for something as obvious as that [Theorem of Corporate Valuation]? And I'd add, Yes, but remember, we proved it rigorously." [Merton Miller, Nobel Laureate, Economics, quoted in "Investment Gurus"] When you started studying Emotional Intelligence, did you say 'oh that'?" "My mission has been to change the industry so that our citizens - the human beings who invest in funds - get a fair shake." [John Bogle] Do you have a mission in your life, working to change the "industry" so the human beings who invest in life/your life, business/ your business, family/your family - whatever you're part of - are getting a fair shake? "Buy right and hold tight." [John Bogle] How are you at making that initial decision? ©Susan Dunn, MA Clinical Psychology, The EQ Coach, http://www.susandunn.cc . Mailto: sdunn@susandunn.cc . Resources, coaching and learning opportunities in Emotional Intelligence to improve all areas of your life.
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