“Look at market fluctuations as your friend rather than your enemy, profit from folly rather than participate in it.” Warren Buffett
Excerpts from: The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness by Morgan Housel.
The book’s premise is that doing well with money has little to do with how smart you are and a lot to do with how you behave.
- “Financial success is not a hard science. It’s a soft skill, where how you behave is more important than what you know.”
- “Soft skills are more important than the technical side of money.”
- “You think about and are taught about money in ways that are like physics (with rules and laws) and not enough like psychology (with emotions and nuance).”
- “Finance is guided by people’s behaviors.“
“It’s been an ideal period for investors. A climate of fear is their best friend. Those who invest when commentators are upbeat end up paying a high price for meaningless reassurance. In the end, what counts in investing is what you pay for a business–through the purchase of a small piece of it in the stock market–and what that business earns in the next decade or two.” Warren Buffett
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