Pride is such an awful thing that keeps humans away from progress.
In this blog post I want to share my thoughts about pride, humility and how it reflects you as an investor. First of all, Warren Buffet is a wise man, and he has stated that the most important quality for an investor is temperament, not intellect.
A lot of people seem to either forget this quote, or not be able to comprehend it. Because, what is it really saying?
Unfortunately, people misunderstand humility. They see it as a sign of weakness or hesitant. That´s simply wrong.
Do you know the one most important life lesson that the marine commando highlights? Wanna guess? Yes, it´s being humble aka having humility. And dear readers, these guys are rock solid. 100 % discipline. Big biceps and a lot of untrimmed manly beards. Hence humility is not about being week, hesitant or submissive. It´s about being able to understand that there is a possibly that you make a mistake or that you have reached the wrong conclusion. And for those guys, it´s crucial that they are able to see this, adjust their thoughts and reach a better decision than before. Overall, it´s about being flexible and adjust to your surroundings. That´s exactly what Charles Darwin was talking about in his book Natural Selection (at least sort off).
Puh. Wow. I almost got lost in the military world and science. Close call. Ok, let´s keep the spotlight on humility.
During my “young” life, I have met a lot of people from different cultures and society classes. From super rich business owners in Singapore, billionaires in Chile, landowners in Tasmania to farmers in Vietnam, Indonesia, and Cambodia, nearly making enough food for their family. But they all share a common desire and fault. They want to be right, and they really don´t want people to tell them they are wrong. This is pride. And pride is such an awful thing that keeps humans away from progress.
Pride is the enemy
As an investor, pride is the enemy and humility is crucial. It´s so easy to think that you have made a perfect analysis, or that the case is stone solid. There is no questions asked. But it´s this stage where most investors are stripped naked and revealed. My point is that you should never settle with the thought that your stocks will forever perform the way they do. That huge companies with great management will forever keep making profit or adding value to the company. That they are an innovative company and that they will always be a step ahead of their competitors. No, always be open for new thoughts and angles. That´s how you become a great investor.
In conclusion I want to recommend a book that I found deeply interesting and it´s called “Innovators Dilemma”. In short it´s about how the best companies in the world managed to die. Heard about Kodak? Maybe if you are a bit older than I am, but they were the biggest photographic company in the world. How did they die? Glad you asked. The board decided that digital photography wasn´t a thing worth talking about. Well, guess it was.