RS Weekly Update - Munger Says Be Curious, Invest Better!
Picking up where we left off last week, here is tendency #6 in Charlie Munger’s take on the psychology of human misjudgment from Poor Charlie’s Almanack.
Tendency #6 – Curiosity Tendency
This is one short but sweet and can be summed up as this: Curiosity is a good thing. It’s funny, as a kid I can remember being so curious about everything. They way things worked, why my parents did what they did, what we were learning in school and why. I’m not as curious by nature now as an adult, but I still am to a degree. Now I see it in my two daughters, always asking the same questions. And of course the most popular one is “Why?”
Curiosity has grown and evolved with man. Munger makes the point of looking first at Athens and their developments in math and science. This all came from their curious nature. Fast forward to the Romans and while they contributed relatively little in the way of math and science per se, they used this knowledge in their development of roads, aqueducts and other forms of engineering. So the curiosity of their predecessors enhanced the ability of their curious nature which ultimately resulted in progress. And so it goes.
Do we need to be curious in investing? Well I would argue that in order to be a successful investor over the long-haul, curiosity is essential. Digging in to companies, competitive advantage, valuation, market conditions, trends and progress; this all requires a curious nature to uncover. Otherwise you’re just throwing darts.
Ultimately, the more we learn the more useful our curious nature serves us. Even better, it can help us overcome any shortcomings or crises that may arise from any of the other psychological tendencies that may pop up. The moral of the story? Stay curious Fools!
There’s a new addition to the portfolio this week. Financial services provider Higher One has finally gotten into buy territory, so here’s my take: http://bit.ly/i6GesV
CEO Howard Schultz makes a big promise for Starbucks: http://reut.rs/e7B2dn
This should result in better tracking of sales for ATVI; especially considering how much digital sales contributes to their overall revenue today: http://bit.ly/hFI117
Straight from the Onion
I knew there was more to it! What a way to get intelligence: http://onion.com/h3eNEB
Jason owns shares of Activision Blizzard