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RS Weekly Update - Munger and Twaddle

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August 31, 2011 – Comments (0)

Dear Fools,

Picking up where we left off last week, here is tendency #23 in Charlie Munger’s take on the psychology of human misjudgment from Poor Charlie’s Almanack.

Tendency #23 – Twaddle Tendency

First off, what the hell is “twaddle” and why does Munger bring it up? Merriam-Webster defines twaddle as “silly idle talk; something insignificant or worthless.” My guess is that Munger has had to deal with an awful lot of twaddle in his many years on this earth; haven’t we all?

Munger’s point with this tendency seems to be that we as humans have an inclination to twaddle away and this can cause some serious damage if it isn’t checked. Of course some gab more than others, so it’s not a blanket assertion.

As investors we see and hear all sorts of foolish (little 'f' foolish) talk out there and the Internet has done nothing but facilitate the dissemination of this twaddle. Now you can click on any site, blog, or the like and read whatever you want. It is extremely important to consider the source lest you get bitten in the rear for coming up with false statements or inaccurate conclusions.

We make it a big point to check our work here at The Fool through financial editing in order to make sure we have our facts straight. It’s much more dependable to get information from SEC filings or company sites themselves as opposed to third-party sources which may actually be nothing more than opinion, or even “twaddle.” End up using twaddle as your basis for investing decisions and you might not be investing for very long.

Foolish best,

Jason (TMFJMo)

One Stock At The Top

Here’s one that’s at the top of my watchlist: http://bit.ly/npNWAK

Jobs’ Resignation Was Priced In

I hooked up with the John Phillips Show out in LA to talk about Steve Jobs’ resignation and what it may mean for Apple: http://bit.ly/nrh2UI

Watchlist Recap

This was a fun recap with Roger Friedman of some watchlisters we talked about months ago: http://bit.ly/q64zc1

Portfolio Returns

Well it seems that this week saw a little improvement in both the Motley portfolio and Mr. Market's as well. As of market close on 8/25/2011 the Motley portfolio stood with gains of 2.64% and Mr. Market had lost 1.25% which means the Motley portfolio is beating the market by 3.89%. This gap has widened a bit from last week's 3.73%, so all in all not too bad in pretty tough conditions.

What I'm really waiting for is a big pop on one or two companies to really create some space. I think I have some great candidates, so time will tell.

Straight from the Onion

He’s just telling it to us straight: http://onion.com/pMw5SX

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