Focus only on the facts. Book#13

I first learned about James Montier from GMO in December 2014 in a speech that Lauren Templeton the great niece of Sir John Templeton made about his achievements here. So I picked up this small book: “The Little Book of Behavioural Investing: How Not to Be Your Own Worst Enemy” as an introduction to behavioural finance.

We, as humans, are not rational. Even if we like to think we are. And it requires a great deal of effort to stay rational in our decision making. I didn’t realise at the time that the field was that vast : Loss Aversion, Overoptimism, Overconfidence, Hindsight Bias, Anchoring, Confirmation Bias, Authority Bias are only those we know best. There is actually a really long list on wikipedia.

Main takeaways : be skeptical, be rational, focus on facts not opinions (valuation, balance sheet, capital discipline), processes rather than outcomes, and slow down the decision making.

That made me want to learn more about other authors and how they approach the subject such as Zweig, Mauboussin, Taleb, Ariely and the god fathers of the discipline Amos Taversky and Daniel Kahneman.

My purpose in life is independence, fulfilment and a better understanding of how the world works. Like Charlie Munger, I believe in the discipline of mastering the best that other people have ever figured out. And like Sir Isaac Newton, I believe in our ability to see further than any others before us by acknowledging that we are standing on the shoulders of giants. With this blog I hope to keep track of my learning about investing, business, decision making, entrepreneurship and self development while inspiring others to do the same. For the moment the format of this blog will be one post for each book that has influenced me, but I expect it to evolve over time. Join my Journey. John.