portfolioafterlife
too fast for love
Economics is not a science in the same way that chemistry or physics is. That’s because, as Taleb explains, there are simply too many variables at play.
But that doesn’t make investment research worthless. It just means we need to adopt the right posture when looking at investment data. We can’t view market-related information as definitive. Instead, we need to see it only as a point of reference. Because of that, we should view the future in terms of ranges and probabilities—not absolutes.
Because investment markets are so unpredictable, it’s important to develop a plan that’s flexible—one that will work whether the stock market is up or down. That can help you stick with your plan throughout market cycles, through good news and bad.
Aesop talked about the difference between a giant oak tree and a lowly reed. While the tree is bigger, the reed is more flexible. This gives the reed an advantage during storms: It can bend, while the oak, because it’s rigid, might simply break. How can you apply this kind of flexibility to your finances? There’s the expression that one should “hold opinions loosely.” I see this as a helpful idea. If we aren’t too adamant with our opinions, it’s much easier to avoid cognitive dissonance when we’re exposed to contrary opinions.

Hold Opinions Loosely - HumbleDollar
WARREN BUFFETT HAS said that, when he’s in his office, he spends about 80% of his time reading—as much as 500 pages each week. And for good reason. One of his mottos is that “knowledge compounds.” Judging by his track record, this approach seems to work. Even in his 90s, Buffett believes...
