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Wednesday, July 6, 2011

Investment Philosophies from the Dead

Everybody who invests money is guided by a certain investment philosophy. Most people are guided by the simple animal instinct - minimum risk, maximum output; in other words, the highest rate of return with the least risk attached to the investment.

I found a very interesting list of investment philosophies at the Financial Philosopher. In fact, what's more interesting is that these philosophies are not, in the true sense, investment ideas; rather they are ideas on human behavior from great men who have long been rolling in the grave.

So here is the list:
  • ...those who wish to know in what direction they are going would do well to give their attention not to the politicians but to the philosophers, for what they propound today will be the faith of tomorrow. ~ I.M. Bochenski (1902-1995)
  • Even if someone knew the entire physical history of the world, and every mental event were identical with a physical, it would not follow that he could predict or explain a single mental event (so described, of course). ~ Donald Davidson (1917-2003)
  • We do not, in fact step out of the movement of things, ask 'What am I to do' and, having obtained an answer, step in again.  All our actions, all our questionings and answerings, are part of the movement of things, and if we can work on things, things can work on us... ~ John Anderson (1893-1962)
  • All human situations have their inconveniences. We feel those of the present but neither see nor feel those of the future; and hence we make troublesome changes without amendment, and frequently for the worse. ~ Benjamin Franklin (1706-1790)
  • A crust eaten in peace is better than a banquet partaken in anxiety. ~ Aesop (620-560 BC)
  • And as imagination bodies forth the forms of things unknown, the poet's pen turns them to shapes, and gives to airy nothing a local habitation and a name. ~ Shakespeare (1564-1616)
  • A hidden connection is stronger than an obvious one. ~ Heraclitus (c.536-470 BC)
  • It is the mark of an educated mind to rest satisfied with the degree of precision which the nature of the subject admits and not to seek exactness where only an approximation is possible. ~ Aristotle (384-322 BC)
  • When the mind is in a state of uncertainty the smallest impulse directs it to either side. ~ Terence (195/185 - 159 BC)
  • Reasoning draws a conclusion and makes us grant the conclusion, but does not make the conclusion certain, nor does it remove doubt. ~ Roger Bacon (c.1214-1292)
  • It's quite true what philosophy says, that life must be understood backwards. But one then forgets the other principle, that it must be lived forwards. A principle which, the more one thinks it through, precisely leads to the conclusion that life in time can never be properly understood, just because no moment can acquire the complete stillness needed to orient oneself backward.~ Soren Kierkegaard (1813-1855)
  • The crowd is untruth. ~ Soren Kierkegaard (1813-1855)
  • Stubborn and ardent clinging to one's opinion is the best proof of stupidity. ~ Michel de Montaigne (1533-1592)
  • If you do not change direction, you may end up where you are heading. ~ Lau Tzu (fl. circa 600BC)
It is true that each of the above general ideas can be regarded as some sort of investment idea. Let me repeat just one: 'The crowd is untruth'.

So true yet most investors follow the crowd. But then when have we ever learnt from the (lack of) wisdom of the crowd.


Source: The Financial Philospher
http://www.thefinancialphilosopher.com/2011/07/guidance-from-dead-philosophers.html


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1 comment:

NagSudheer said...

A nice article Sir.. "Philo-Sophy" RoCkZzzz