Little Stories by Morgan Housel

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Rowan Oak
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Little Stories by Morgan Housel

Post by Rowan Oak »

Some things are immeasurably important, impossible to quantify. But they can make all the difference in the world, often because their lack of quantification causes people to discount their relevance, or even deny their existence.
Andrew Carnegie was asked for money advice and said: “Even a fool can make a million dollars. But it takes a sage to keep it. Do you hear me?” He knew from experience.
https://www.collaborativefund.com/blog/little/

Little Stories Jun 23, 2021 by Morgan Housel
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger
azanon
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Re: Little Stories by Morgan Housel

Post by azanon »

“Even a fool can make a million dollars. But it takes a sage to keep it. Do you hear me?”

I hear this a lot, and I get the sentiment, but if you ask me, it's a bit overstated. Put the million dollars in a US Treasury Bill (or short term treasury) ETF - done- you keep it, and even inflation adjusted (on average). That doesn't take a sage to do that.

I get the sentiment, just deflating it a little bit :-) And, on average, making the million is, without question, the harder of the two feats.......
FRANK2009
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Re: Little Stories by Morgan Housel

Post by FRANK2009 »

Really good blog lesson that teaches a lot.

John Bogle in his book "Enough", also writes about the importance of things that can not be quantified. Thing like truth, discipline, and loyalty.
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arcticpineapplecorp.
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Re: Little Stories by Morgan Housel

Post by arcticpineapplecorp. »

Morgan's one of the best writers out there today. Glad he left the motley fools.

So many gems here. This one reminded me of a story I heard recently on Planet Money (link below) regarding the inventor of Hot Cheetos:
Related: I often wonder how many tens of billions of dollars have been paid to management consultants to solve problems that low-wage line workers had solutions for.
https://www.npr.org/2021/05/12/996228628/hot-cheetos

I also think about how much money Roaring Kitty made, but how much might go to lawyers fighting lawsuits against him.
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Robot Monster
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Re: Little Stories by Morgan Housel

Post by Robot Monster »

azanon wrote: Thu Jun 24, 2021 2:37 pm “Even a fool can make a million dollars. But it takes a sage to keep it. Do you hear me?”

I hear this a lot, and I get the sentiment, but if you ask me, it's a bit overstated. Put the million dollars in a US Treasury Bill (or short term treasury) ETF - done- you keep it, and even inflation adjusted (on average). That doesn't take a sage to do that.
I think people who have made a ton of money in their investments might be disinclined to pull the plug on the very risk that has done them so well, especially in this environment where "cash is trash".
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Re: Little Stories by Morgan Housel

Post by Fallible »

FRANK2009 wrote: Thu Jun 24, 2021 2:46 pm Really good blog lesson that teaches a lot.

John Bogle in his book "Enough", also writes about the importance of things that can not be quantified. Thing like truth, discipline, and loyalty.
And here is a quote from Jack Bogle in Enough, one of my favorite books.
“As I have earlier noted, the most important things in life and in business can’t be measured. The trite bromide 'If you can measure it, you can manage it' has been a hindrance in the building a great real-world organization, just as it has been a hindrance in evaluating the real-world economy. It is character, not numbers, that make the world go ‘round. How can we possibly measure the qualities of human existence that give our lives and careers meaning? How about grace, kindness, and integrity? What value do we put on passion, devotion, and trust? How much do cheerfulness, the lilt of a human voice, and a touch of pride add to our lives? Tell me, please, if you can, how to value friendship, cooperation, dedication, and spirit. Categorically, the firm that ignores the intangible qualities that the human beings who are our colleagues bring to their careers will never build a great workforce or a great organization.”
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
tomsense76
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Re: Little Stories by Morgan Housel

Post by tomsense76 »

Similar to the quote attributed to Einstein
Not everything that can be counted counts and not everything that counts can be counted
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
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Re: Little Stories by Morgan Housel

Post by nisiprius »

azanon wrote: Thu Jun 24, 2021 2:37 pm “Even a fool can make a million dollars. But it takes a sage to keep it. Do you hear me?”

I hear this a lot, and I get the sentiment, but if you ask me, it's a bit overstated. Put the million dollars in a US Treasury Bill (or short term treasury) ETF - done- you keep it, and even inflation adjusted (on average). That doesn't take a sage to do that.
The problem is that the same temperament that makes it possible to take the risks that make a million dollars make it almost impossible to stop taking risks and put the million into Treasury bills.

Jesse Livermore made a fortune shorting stocks in 1929. He made and lost several fortunes. And the end state was that he lost it all and committed suicide.

And nowadays, the wallstreetbets community is full of people saying things like "Say it with me … Stocks only go up. Only losers take profits." That is not an environment that is conducive to keeping a million.
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heyyou
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Re: Little Stories by Morgan Housel

Post by heyyou »

Housel wrote a page of very good advice for those who want to learn how to have more money, starting with the statement that spending money to show others that you have money, is the quickest way to have less money.

My opinion is Housel is the best of the newer financial writers. The long term Bogleheads's favorites do not have new ways to say what they said so well 20 years ago in their first or second books on allocating. Those concepts are basic enough to defy much embellishing, so I welcome the new writers whose message is to live below your means.
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Re: Little Stories by Morgan Housel

Post by KlangFool »

azanon wrote: Thu Jun 24, 2021 2:37 pm “Even a fool can make a million dollars. But it takes a sage to keep it. Do you hear me?”

I hear this a lot, and I get the sentiment, but if you ask me, it's a bit overstated. Put the million dollars in a US Treasury Bill (or short term treasury) ETF - done- you keep it, and even inflation adjusted (on average). That doesn't take a sage to do that.

I get the sentiment, just deflating it a little bit :-) And, on average, making the million is, without question, the harder of the two feats.......
azanon,

During the Telecom Boom and Bust, some of my peers got RICH because their startup was sold and they had 10+ millions. Only one of them (person A) put it all in the treasuries. Person A had enough. Others put their millions into the Telecom stocks and lost a significant amount of their wealth.

<<That doesn't take a sage to do that. >>

Yes, it does take a sage. Many of the 100% stock and 0% bond threads should convince you of that.

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Fallible
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Re: Little Stories by Morgan Housel

Post by Fallible »

Carnegie’s statement - “Even a fool can make a million dollars. But it takes a sage to keep it.” - is similar to Warren Buffett’s comment, “To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What's needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.”

“Sage” generally refers to wisdom, which is probably what Carnegie and Buffett refer to.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: Little Stories by Morgan Housel

Post by ososnilknarf »

azanon wrote: Thu Jun 24, 2021 2:37 pm “Even a fool can make a million dollars. But it takes a sage to keep it. Do you hear me?”

I hear this a lot, and I get the sentiment, but if you ask me, it's a bit overstated. Put the million dollars in a US Treasury Bill (or short term treasury) ETF - done- you keep it, and even inflation adjusted (on average). That doesn't take a sage to do that.

I get the sentiment, just deflating it a little bit :-) And, on average, making the million is, without question, the harder of the two feats.......
Tell that to my brother-in-law who recently had 1 million worth of Dogecoin which he had bought for $7,000. I couldn't convince him to sell it. Now it is still worth maybe $300,000 and he still won't sell it because he wants to wait for it to go back up.

I think Carnegie was on to something.
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Re: Little Stories by Morgan Housel

Post by arcticpineapplecorp. »

nisiprius wrote: Thu Jun 24, 2021 8:38 pm
azanon wrote: Thu Jun 24, 2021 2:37 pm “Even a fool can make a million dollars. But it takes a sage to keep it. Do you hear me?”

I hear this a lot, and I get the sentiment, but if you ask me, it's a bit overstated. Put the million dollars in a US Treasury Bill (or short term treasury) ETF - done- you keep it, and even inflation adjusted (on average). That doesn't take a sage to do that.
The problem is that the same temperament that makes it possible to take the risks that make a million dollars make it almost impossible to stop taking risks and put the million into Treasury bills.

Jesse Livermore made a fortune shorting stocks in 1929. He made and lost several fortunes. And the end state was that he lost it all and committed suicide.

And nowadays, the wallstreetbets community is full of people saying things like "Say it with me … Stocks only go up. Only losers take profits." That is not an environment that is conducive to keeping a million.
from wikipedia:
His second divorce in 1932, the non-fatal shooting of his son by his wife in 1935, and a lawsuit from his Russian mistress led to a decline in his mental health, while the creation of the U.S. Securities and Exchange Commission in 1934 imposed new rules that affected his trading. Although it is unknown exactly how it happened,[14] he eventually lost his fortune and filed bankruptcy for the third time in 1934, listing assets of $84,000 and debts of $2.5 million.[9][6] He was suspended as a member of the Chicago Board of Trade on March 7, 1934.[14]...

Suicide

On November 28, 1940, just after 5:30 pm, Livermore fatally shot himself with an Automatic Colt Pistol in the cloakroom of The Sherry-Netherland hotel in Manhattan, where he usually had cocktails. Police found a suicide note of 8 small handwritten pages in Livermore's personal, leather-bound notebook.[12][18] The note was addressed to Livermore's wife, Harriet (whom Livermore nicknamed "Nina"), and it read, "My dear Nina: Can't help it. Things have been bad with me. I am tired of fighting. Can't carry on any longer. This is the only way out. I am unworthy of your love. I am a failure. I am truly sorry, but this is the only way out for me. Love Laurie".[14]

His son, Jesse Livermore Jr., committed suicide in 1975. His grandson also killed himself.[6]

source: https://en.wikipedia.org/wiki/Jesse_Livermore
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
azanon
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Re: Little Stories by Morgan Housel

Post by azanon »

ososnilknarf wrote: Sat Jun 26, 2021 3:43 pm
azanon wrote: Thu Jun 24, 2021 2:37 pm “Even a fool can make a million dollars. But it takes a sage to keep it. Do you hear me?”

I hear this a lot, and I get the sentiment, but if you ask me, it's a bit overstated. Put the million dollars in a US Treasury Bill (or short term treasury) ETF - done- you keep it, and even inflation adjusted (on average). That doesn't take a sage to do that.

I get the sentiment, just deflating it a little bit :-) And, on average, making the million is, without question, the harder of the two feats.......
Tell that to my brother-in-law who recently had 1 million worth of Dogecoin which he had bought for $7,000. I couldn't convince him to sell it. Now it is still worth maybe $300,000 and he still won't sell it because he wants to wait for it to go back up.

I think Carnegie was on to something.
I was just saying you don't have to be a sage to keep it. I never claimed a complete, irresponsible idiot couldn't lose it.

Yes, of course, he'll be broke in due time. I equate going from 7K to 1 Million in Doge to a person that just bought a lottery ticket and hit the million. They're not brilliant, just lucky and irresponsible with money. Even the sun shines..... you know how it goes....
Fallible
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Re: Little Stories by Morgan Housel

Post by Fallible »

arcticpineapplecorp. wrote: Sat Jun 26, 2021 3:48 pm
nisiprius wrote: Thu Jun 24, 2021 8:38 pm
azanon wrote: Thu Jun 24, 2021 2:37 pm “Even a fool can make a million dollars. But it takes a sage to keep it. Do you hear me?”

I hear this a lot, and I get the sentiment, but if you ask me, it's a bit overstated. Put the million dollars in a US Treasury Bill (or short term treasury) ETF - done- you keep it, and even inflation adjusted (on average). That doesn't take a sage to do that.
The problem is that the same temperament that makes it possible to take the risks that make a million dollars make it almost impossible to stop taking risks and put the million into Treasury bills.

Jesse Livermore made a fortune shorting stocks in 1929. He made and lost several fortunes. And the end state was that he lost it all and committed suicide.

And nowadays, the wallstreetbets community is full of people saying things like "Say it with me … Stocks only go up. Only losers take profits." That is not an environment that is conducive to keeping a million.
from wikipedia:
His second divorce in 1932, the non-fatal shooting of his son by his wife in 1935, and a lawsuit from his Russian mistress led to a decline in his mental health, while the creation of the U.S. Securities and Exchange Commission in 1934 imposed new rules that affected his trading. Although it is unknown exactly how it happened,[14] he eventually lost his fortune and filed bankruptcy for the third time in 1934, listing assets of $84,000 and debts of $2.5 million.[9][6] He was suspended as a member of the Chicago Board of Trade on March 7, 1934.[14]...

Suicide

On November 28, 1940, just after 5:30 pm, Livermore fatally shot himself with an Automatic Colt Pistol in the cloakroom of The Sherry-Netherland hotel in Manhattan, where he usually had cocktails. Police found a suicide note of 8 small handwritten pages in Livermore's personal, leather-bound notebook.[12][18] The note was addressed to Livermore's wife, Harriet (whom Livermore nicknamed "Nina"), and it read, "My dear Nina: Can't help it. Things have been bad with me. I am tired of fighting. Can't carry on any longer. This is the only way out. I am unworthy of your love. I am a failure. I am truly sorry, but this is the only way out for me. Love Laurie".[14]

His son, Jesse Livermore Jr., committed suicide in 1975. His grandson also killed himself.[6]
source: https://en.wikipedia.org/wiki/Jesse_Livermore
.
FYI, Housel wrote of Livermore in his recent book, The Psychology of Money, chapter 5, “Getting Wealthy vs. Staying Wealthy.”
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: Little Stories by Morgan Housel

Post by RadAudit »

Rowan Oak wrote: Thu Jun 24, 2021 2:33 pm Andrew Carnegie was asked for money advice and said: “Even a fool can make a million dollars. But it takes a sage to keep it. Do you hear me?” He knew from experience.
Housel did a good job with that article.

But the unsaid part that bothers me is that for most / many folks no matter how much you have it's mostly gone by the third generation. Keeping it in the family is very difficult.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
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