Take Stock

Share

Take Stock | I AM TECHNOLOGY blog

Take Stock | I AM TECHNOLOGY blog by Trey Warme, San Diego

I enjoyed an email I received from The Motley Fool the other day. In this email was a quick read by Morgan Housel, written while he was in the waiting room to see the doctor, where he shares his thoughts on some commonalities he sees between financial advice and medical advice. The commonalities and advice were simple and seemed almost embarrassingly obvious, like.. well duh!

This provoked thoughts for me about could the realization of these commonalities running through other areas in life make for possible beneficial use of these observations in those areas too? If so, what might some of those areas be? See what you think!

 Financial advice is a lot like medical advice.

“Financial advice is a lot like medical advice.

In both cases, people place a much higher value on complex analysis than on simple guidance. Yet, in many cases, you only need the complicated advice if you’ve ignored the basic advice to begin with.

In both cases, people place a much higher value on complex analysis than on simple guidance. Yet, in many cases, you only need the complicated advice if you’ve ignored the basic advice to begin with.

Lung cancer treatments, for example, have become amazingly sophisticated. But for most people, they will never be as effective as two simple words: Don’t smoke. 

A lot of investing advice is incredibly complex, too. But like medicine, most of what you need to know are common-sense rules that get overlooked or written off as too obvious.”

 A lot of investing advice is incredibly complex, too. But like medicine, most of what you need to know are common-sense rules that get overlooked or written off as too obvious.

I wonder how many other cases in our lives, we place a higher value on complex analysis than on simple guidance? And in how many of those cases would we only need, or think we need, the complicated advice because we’ve ignored the basic advice to begin with?

Are the gurus and experts of today cranking out their foolproof complex theories, simply the result of people not just following the basics to begin with?

Then, instead of flipping through a magazine while in the waiting room, Morgan listed 18 simple rules he tries to follow to avoid the need for complicated advice, which he provided and are below.

While reading through his list, I wondered might there also be applicability of these simple rules to other areas of our lives? If we were to replace the words: investors with people, and trade with accomplishment, investments with relationships, and market crashes with people change.

  1. Change your mind as often as the facts change.
  2. Ignore people who refuse to change their minds when the facts change.
  3. Read more books and fewer articles.
  4. Read more history and fewer forecasts.
  5. You have no obligation to have an opinion about anything.
  6. You have a strict obligation to not have an opinion about things you don’t understand.
  7. Judge investors by the quality of their arguments, not the performance of their most recent trade.
  8. You’re twice as biased as you think you are. (Four times if you disagree with that statement.)
  9. Be careful when reading about how stupid investors can be… and not realizing you’re reading about yourself.
  10. Emotional intelligence is more important than book intelligence.
  11. The correlation between confidence and future regret is high.
  12. Don’t try to keep up with the Joneses. They’re no happier than you are.
  13. The most powerful way to have more money is to learn to live with less. You have complete control over your lifestyle.
  14.  Big risks will always be disregarded; small risks, always blown out of proportion.
  15. You’re only diversified when some of your investments perform worse than others.
  16. Admit when you’re wrong.
  17. Assume the worst, hope for the best, and accept reality.
  18. Every five to seven years, people forget that the market crashes every five to seven years.

So there you have it: simple, straightforward advise that will cure your latest investing ailment. Everything else is details.

What do you think? Could this list be helpful in areas of life other than investing? Is complex advice often only necessary because we have forgotten or ignored the simple basics? See any other areas of commonalities that have not yet been touched on? Let’s hear it in the comment box below!

 

Attention: #bloggerswanted #bloggerrequest #bloggers #guestblogging #guestpost

‪#ShareTheLove of your thoughts, #beheard and #getsome on ➜ http://blog.treywarme.com

✍ Are you a #writer living la vida loca of a #writerslife? Like to #write? Would you like to gain exposure to your #writing by publishing an article here on the new I AM TECHNOLOGY blog? Anything you write that is relevant to the material on the site or to technology, personal, spiritual or career development. I will promote you and your work along with the blog. You can widen your audience. Contact Trey for more info, trey@treywarme.com.

 

Let’s connect!

 

                 

Share