STREET DOGS: Money is emotional and people are different
Most investment debates — debates that literally make markets — are just a reflection of people making different decisions
From Morgan Housel at Collaborative Fund: We rarely recognise that most investment debates — debates that literally make markets — are just a reflection of people making different decisions not because they disagree with each other but because they view investing with a different set of priorities. If you’re trying to maximise risk-adjusted returns, you have no idea why someone would buy a 10-year treasury bond with a 2% interest rate. Trading 3x leveraged inverse exchange-traded funds is financial suicide for some and a cool game for others. Long-term investors who criticise day traders bet on sport because it’s fun. People who scream at you for overallocating into real estate investment trusts buy six-bathroom homes for their four-person family. Two rational people the same age with the same finances may come to totally different conclusions about what’s right for them, just as two people with the same cancer can pick radically different treatments. And just as medical textbooks c...
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