STREET DOGS
The problem with being clever
You can be too clever to make sense of the world or in justifying mistakes
From Morgan Housel at Collaborative Fund: Average people can often learn faster than the super-intelligent, because the super-intelligent try to cram the real world into the theories they’ve been taught, while average folks are better at accepting the real world at face value. We judge others solely on their actions, but when judging ourselves we have an internal dialogue that justifies our mistakes and bad decisions. If you’re a fund manager who earned terrible returns, I may be able to instantly point out what went wrong: buying during a bubble, selling during a panic, not enough diversification, whatever. But if I’m a fund manager who earns terrible returns, I can tell myself a story justifying and explaining my decisions. "The Fed distorted the economy," I might say, or "Look at my model. It’s the market that’s wrong!"Two things come from this. One, we think of ourselves as less flawed than others, because we rarely hear their internal justifications for their mistakes, but we’r...
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