Morgan Housel: Great Investing Has Nothing To Do With How Smart You Are

Johnny HopkinsMorgan HouselLeave a Comment

In this interview with The Investor’s Podcast, Morgan Housel explained why great investing has nothing to do with how smart you are. Here’s an excerpt from the interview:

Housel: This is to me is kind of the premise of my book, is just that good investing is not about what you know. It’s not about how smart you are, or where you went to school, or how sophisticated the Excel model you have is.

Good investing is overwhelmingly just about how you behave. It’s about your relationship with greed and fear, and your ability to take a long-term mindset, and who you trust, how gullible you are, those kinds of things.

To me, the most important part is that behavior is hard to teach. It’s almost impossible to teach even to someone who’s very smart. You can teach them calculus, and you can teach them data analysis. You can teach them how to read a balance sheet, but you can’t teach people how to be patient.

It’s just, some people have it and some people don’t. That can be disheartening to hear, but I think it’s really true, and all the evidence that we have shows that that is true, that I don’t think there’s any evidence unless we’re talking about like the marshmallow test at like a really basic level.

I don’t think there’s much evidence that people who are extremely intelligent are also going to be patient investors or the opposite. The people who don’t have a lot of training and sophistication, those people can be patient, very successful investors. I think it’s just very easy to overlook that in this industry. The disconnect between behavior and intelligence.

You can watch the entire discussion here:

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