I like to read, so I read a lot. Too much, actually, according to my kids who claim that I never want to go anywhere. But I digress… I especially like to read about history and the stock market. Every now and again I come across someone who has true wisdom on the subject of investing. I’m a long time fan of William Bernstein, who wrote The Four Pillars of Investing – a book that I often recommend to my coaching clients. These pearls of wisdom are taken from his forward to a book by Jim Dahle, M.D. called The White Coat Investor.
“You have probably already been taken advantage of by an insurance agent, a stockbroker, a financial planner, a realtor, a banker, or a lender once or twice in your life due to your lack of financial knowledge.”
“Your high income alone will not automatically lead to financial success. You must convert your high income into a high net worth in order to become financially independent.”
“Most physicians, no matter what their specialty, labor under the illusion that because they were smart enough to get into med school, that talent somehow carries over to investing. Rest assured it doesn’t.”
“Finance academics have been collecting and analyzing data on financial forecasting for more than eight decades, and they have concluded that no one—no one—has ever been able to consistently call market direction.”
“Think you know how to pick stocks? Then guess again. Every time you buy or sell the person on the other side of the trade likely has an IQ of 160, spends 70 hours per week analyzing his industry, and has access to computing power and databases you can only dream of.”