Misunderstood Profession
At a student Q&A, Buffett was asked what surprises him the most.

He replied pointing to Bill Gates who was standing next to him:

“People look at Bill Gates and think they can’t do what he did. They look at me and think they can do what I did”

For some reason, everyone believes they can manage their money proficiently even though history has a completely different story which says that while “investment” returns have been spectacular, “investors” have returned empty handed or abysmally little to talk about.

Perhaps the art of money management is misunderstood as a science.

1) Money management is to do a lot with undefined patterns that is harnessed by years of experience.

2) Money management is about taking action but also largely also about inaction. Money management is a lot about doing nothing and letting “boredom” win the battle for “patience” to win the war

3) Money management is more a science of human psychology and behaviour managment than a science of statistics that people believe algorithms/robots can conquer.

It is an irony that one assumes that “reading the offer document” is all that is needed to become an investor.

If a document and a TV channel could make investors proficient then all one would need would be a similar document and TV channel to manufacture successful doctors.

The truth is that even a doctor becomes proficient, not by earning his or her degree but because of years of experience of seeing countless patients.

As regards “malpractices”, the perpetrators of the same should to be booked but then one also needs to understand that “exceptions” cannot be turned into the pen that writes the rules for the rest.

  • Shreeniwas Gadiyar
    Posted at 09:48h, 10 January Reply

    Perfect analogy with doctors. Will be very useful in handling cases of customer wanting to go for direct plans

    Posted at 10:07h, 10 January Reply

    Superb points

  • Prabir Sur
    Posted at 10:55h, 10 January Reply

    Yes Sir absolutely right.
    People think that just by going through FD rate and the illusion of Guaranteed return led them to get optimal return.
    They forget two aspects of Investing.
    The destructive power of Inflation and the additive power of compounding.
    Einstein is correct and give the essence of Personal FINANCE.
    Compound Interest ..he who understand it earns it and he who doesn’t pays it.
    And strangely majority of the people couldn’t even realize that they are paying a heavy price.Thats ehy LIC endowment plan sell like hot cakes inspite of giving just 4 to 5 %CAGR long term return.

  • -NiSHiKaNT HoRe, NaGPuR
    Posted at 10:56h, 10 January Reply

    VeRY NiCeLY put the words for misunderstood profession which has enormous potential to make one and all really WeaLTHY and FiNaNCiaLLY free.

  • Arvind Dubey
    Posted at 15:27h, 10 January Reply

    Exactly even people in our profession also sometimes promote the products just like an insurance products but first we need to understand ourselves what actually is debt and equity and then what are professional ethics and then only suggests the solution

  • Aditya Chandekar
    Posted at 18:27h, 12 January Reply

    Awesome 🙂

  • Jayant Akhaury
    Posted at 02:27h, 13 January Reply

    Very well explained investment as an art . Penny wise pound foolish ideas lures many to by pass profession advisors for investment and to some extent dearth of true professional financial advisors also leads to direct mode of investment. Experience and time are the teachers for all.

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