I read all day it seems as part of my job.
Lately I have come across three investing gems that have stuck with me.
Luckily, the first 122 gems are in this one article from Morgan Housel. Print it, learn it, love it…repeat. This one from Warren Buffett stood out most:
35. As last year’s Berkshire Hathaway shareholder meeting, Warren Buffett said he has owned 400 to 500 stocks during his career, and made most of his money on 10 of them. This is common: a large portion of investing success often comes from a tiny proportion of investments.
I know this same fact is true for me. There are 10 investments in my life (those that took my time and money) that have made THE difference to my portfolio returns.
Next up (#123), Paul Graham has a short essay called’How to be an Expert in a Changing World‘. It is all about the people:
Another trick I’ve found to protect myself against obsolete beliefs is to focus initially on people rather than ideas. Though the nature of future discoveries is hard to predict, I’ve found I can predict quite well what sort of people will make them. Good new ideas come from earnest, energetic, independent-minded people.
Betting on people over ideas saved me countless times as an investor. We thought Airbnb was a bad idea, for example. But we could tell the founders were earnest, energetic, and independent-minded. (Indeed, almost pathologically so.) So we suspended disbelief and funded them.
I look back at nearly 100 angel investments and less than a handful of the companies made it on the original idea. The people make it happen. I bet on people. I do not live in spreadsheets, I live on the street and on the stream.
At #124, friend Raoul who I recently interviewed (RealVisionTV) had this to say on the subject of trading and investing:
The smartest people in the world are the people you have never heard of
When I created Wallstrip and Stocktwits, that was something I believed. Each day that belief gets stronger. Every day I dip into the messy streams knowing so many others will not. The undiscovered talent and idea generation is staggering.
Which brings me to #125 from the legend Steve Martin whose movie the Jerk had many Wall Street references that matter just as much today:
Never trust Whitey and know the difference between shit and shinola.