Aswath Damodaran: Think Of Investing As Humble Money Versus Arrogant Money

Johnny HopkinsAswath DamodaranLeave a Comment

In his recent presentation with the Nordic Business Foundation, Aswath Damodaran explained why you should think of investing as humble money versus arrogant money. Here’s an excerpt from the presentation:

Damodaran: I’m going to suggest as a final point that rather than think of money as smart money versus stupid money, that you think of money as humble money versus arrogant money.

What’s the difference?

Humble investors when they’re successful know that a big chunk of their success comes from being lucky. Being at the right time at the right place… at the right place at the right time, and when they’re wrong recognize that they need to change.

Arrogant investors think that every investing win is a sign of their skill and every failure is somebody else’s fault.

So if I had to pick somebody to manage my money I want it to be humble money, not arrogant money.

What are the signs of arrogance?

Anybody who makes a 300 year plan.  Masa Son are you listening, is not a humble person. I would not trust Softbank to manage my money simply because it’s driven by arrogance.

The notion that they’re smarter than everybody else. Accept humility, I think is the single most important characteristic you need to be a successful investor.

You can watch the entire presentation here:

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