All human beings are deeply flawed and are susceptible to a multitude of cognitive biases and irrational behaviors. To be a great investor, you must examine your flaws so you can seek to counter them. Three great guides on this journey are Charlie Munger, Jason Zweig, and Guy Spier.
Charlie Munger: The Psychology of Human Misjudgment
The following audio recording of a speech Charlie Munger gave to an audience at Harvard around 1995 is a great place to begin. It is an hour and 16 minutes long, but a great introduction to Munger. I devour everything I can from him.
Jason Zweig and Guy Spier
Jason Zweig is another great guide on this journey to knowing yourself and your flaws. His book Your Money and Your Brain is a classic and a must read for the serious investor.
Jason’s column in the Wall Street Journal is a great short-form introduction to his thinking. His latest column, Giving Yourself an Investing Makeover, introduces us to a great investor and courageous seeker of the truth, Guy Spier. I say courageous because his rigorous honesty in publicly naming his own flaws is amazing in this age of “experts” who pretend they have all of the answers all of the time.
From the article:
In a book to be published in September by Palgrave Macmillan, ‘The Education of a Value Investor,’ Mr. Spier describes his struggle to improve his decision-making hygiene.
Seldom has a successful money manager so painfully flagellated himself in public. In the book, Mr. Spier calls himself ‘blind,’ ‘dumb,’ ‘spectacularly foolish,’ ‘misguided,’ ‘stumbling,’ ‘wrong,’ ‘vulnerable’ and, over and over again, ‘irrational.’
‘We think we control our environment, but in fact it’s our environment that controls us,’ Mr. Spier told me. ‘We can’t change the world. The only thing we can change is ourselves, by trying to get a better understanding of our own messed-up wiring.’
The Courage to Seek and See the Truth About Yourself
Do you have the courage to see the truth about your flaws as a human being and an investor? To me, the really great investors are the ones who examine their own flaws and seek to correct for them.
The vices we scoff at in others laugh at us within ourselves.
— Sir Thomas Browne