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Most people behave as though they are smarter than Soros and Buffett

If I boasted that I am smarter than George Soros, Warren Buffett and Jack Bogle combined I would be accused of arrogance. Quite rightly so as well.  Consider something startling though: most people may not think they are that smart, but they certainly behave as though they are and it affects their wallets.

This week I had an interesting email exchange that I will share here.  A man who I was about to meet, subsequently said he doesn’t have any money and doesn’t like to invest in markets. I will call this man Andy, to protect identities. My email response is below.

“Thanks Andy, completely understand and I really like your honesty.  Obviously, if you don’t have any money, there is no point in doing the meeting. We are both busy, so I appreciate this.

But I will say one thing.  There is 200+ years of academic data now on markets.  The US Markets (the Dow Jones) were at 66 in 1900, 3,500 in 1995 and hit 26,800 this year. 

In other words, long-term, markets always rise. But it is a bumpy ride.  The markets are just the biggest firms in the US and other firms.  

Anybody who says they don’t want to invest in markets is saying they are smarter than the market. Smarter than George Soros, Warren Buffett and all the trillions of USD invested in the markets. 

I am pretty sure we both aren’t smarter than the market. Indeed, if you would had started investing 10-20-30 years ago when you got your first job, you would have money now….which goes to show the point about not being smarter than the market. 

 So once you do have spare cash in the end, even if you just self-invest by yourself online without the need of the help of a company, a rational long-term investor should be in the markets as they have outperformed other investments. 

 I hope you have a good weekend and take care”

Brutally honest, in a polite way, but also true.  Even for businesspeople who are more successful than the unfortunate person above, also remember one thing; over-performance doesn’t last. If it did last there would now be 120,000 billionaires in the US based on 1900 figures as per the explained in this podcast.

Getting rich investing often requires some humility.
For questions on this article contact me at adamfayed@iamgltd.com



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