Sublime

Peter Lynch, one of the few fund managers who made above-market returns and then got out before the market leveled him, wrote in his book One Up on Wall Street that the amateur investor has “numerous built-in advantages, which, if exploited, should result in outperforming the market and the experts.” In other words, you should be doing this yoursel

So people’s ability to save is more in their control than they might think.

Go back to my 20s and at any given point I held something like 25 individual stocks. I don’t know how I did as a stock picker. Did I beat the market? I’m not sure. Like most who try, I didn’t keep a good score. Either way, I’ve shifted my views and now every stock we own is a low-cost index fund.

“If I have the Bloomberg on, I find I am looking at what the market is doing,” he said. “I really like to be the one who is parsing the information, rather than having a lot of irrelevant information thrown at me.”

Let’s suppose that the cost to the bank of maintaining a checking account is $100 per year, and a competitor comes in and offers “Checking account for just $100 and No Hidden Fees.” Who is going to win this battle?

No trader or investor wanted to poke around suburbs to find out whether the homeowners to whom he had just lent money was creditworthy.

“If you don’t know who you are, Wall Street is an expensive place to find out.” — Adam Smith, The Money Game

What are the odds that people will make smart decisions about money if they don’t need to make smart decisions—if they can get rich making dumb decisions? The incentives on Wall Street were all wrong; they’re still all wrong.