BEWARE OF GEEKS BEARING FORMULAS

In the midst of a surfeit of (bad) investment advice for tough times, one voice stands out like Mars at Perihelion.  Here is a quote from one who has seen it all, endured it all and yet remains on top.  The words to follow, by Warren Buffett, are worthy of serious consideration in my opinion as they are deeply personal yet bear universal applicability in areas far beyond the world of finance.  – daniel w. jacobs

Warren Buffett

“Approval . . . is not the goal of investing. In fact, approval is often counter-productive because it sedates the brain and makes it less receptive to new facts or a re-examination of conclusions formed earlier.

Beware the investment activity that produces applause; the great moves are usually greeted by yawns. Investors should be skeptical of history-based models.

Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive.

Too often, though, investors forget to examine the assumptions behind the symbols.

Our advice: Beware of geeks bearing formulas.”

This now off-quoted quip above, comes straight from Warren Buffett’s open letter to Berkshire Hathaway’s shareholders.  His legendary investment savvy has now another five-word summary worthy of his reputation.  My hat is off to him . . . again.

daniel w. jacobs
(c) 2009-2020, all rights reserved

~ by daniel w. jacobs on March 2, 2009.