Never let this “deadly sin” stand in the way of your investment portfolio! [Wednesdays: The Independent Investor]
Miles Everson’s Business Builder Daily speaks to the heart of what great marketers, business leaders, and other professionals need to succeed in advertising, communications, managing their investments, career strategy, and more.
A Note from Miles Everson:
Hi, everyone!
We’re excited to share with you a great tip that applies to both your investments and personal life.
Every Wednesday, we discuss various investing tips, insights, and strategies because these can help us achieve true financial freedom. Additionally, this will positively impact not just our personal lives but also our families’ lives.
Let’s talk about an important life concept in today’s article.
Keep reading to know why you shouldn’t let your ego stand in the way of your success and investment portfolio.
Miles Everson
CEO, MBO Partners
Chairman of the Advisory Board, The I Institute
The Independent Investor
Ego.
According to a definition from Vocabulary.com, ego refers to a part of a person’s identity that he or she considers his or her “self.”
While there’s nothing wrong with this psychological definition, the term eventually got a bad rap and is now commonly used to describe an inflated feeling of one’s superiority to others. That’s why if you say someone has a big ego, it’s like saying that person is too full of himself or herself.
Did you know that due to the evolution of ego’s definition, it has become associated with another term?
This other word has something to do with the feeling or quality of having an excessively high opinion of oneself or one’s importance: Pride.
Photo from The Business Journals
Professor Joel Litman, Chairman and CEO of Valens Research and Chief Investment Strategist of Altimetry Financial Research, always reminds his teams to refrain from using “pride” or “proud” in their scripts, articles, social media posts, emails, messages, etc.
Why?
It’s because while “pride” or “proud” isn’t absolutely terrible, it also doesn’t mean the word is inherently good. According to Professor Litman, it’s just a few steps away from other negative feelings like shame, anger, or guilt.
Professor Litman also states he’s amazed that most of society has ignored thousands of years of great advice about one of the 7 deadly sins. In fact, the words “pride” and “proud” have become part of people’s daily vernacular.
For example: Some say they’re “proud” of their job, their business, their children, or the person they’ve become.
However, if you look at what great sages from all over the world teach about “pride,” you’d understand this isn’t something you should be using in your everyday conversations.
“Pride goes before destruction.”
“Pride of wealth destroys wealth, pride of strength destroys strength.”
“A wise man has dignity without pride; a fool has pride without dignity.”
“Pride” is at the Root of Some of the Worst Disasters in History
Some of the biggest disasters in the world such as the Fukushima Daiichi nuclear meltdowns, space shuttle Challenger and Columbia explosions, and Deepwater Horizon oil spill had “pride” at their core.
Experts have studied the causes of these events and their findings point to “pride.” The people involved in these crises were too “proud” of their work to admit they were wrong. They ignored—or probably hid—their mistakes until it was too late.
Problems with “pride” can manifest in investing too.
In fact, some of the most successful investors have warned others against this emotion in investing. One of these is Tudor Investment Corporation founder Paul Tudor Jones, who said:
“Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead.”
Ray Dalio, co-chief investment officer of Bridgewater Associates, has also warned other investors against “pride.” He said many people “allow ego to stand in the way of learning.”
In investing, that’s a BIG NO-NO. If you’re “proud” of your investing acumen, you have to brace yourself for financial ruin and disaster.
What do these warnings and advice tell you?
“Pride” won’t do you any real good in the long run! Instead, it will only set you up for failures and disappointments.
Think about this: “Pride” makes you think you already know everything and closes your mind to learning. The thing is, life is full of changes. What worked for you yesterday may not work today… and what worked for you today may not work tomorrow.
Markets change. Businesses change. Systems change. If you’re so full of yourself to the point you become stuck in your old ways, you’ll miss out on LOTS of opportunities to grow your wealth and other aspects of your life.
That’s why you always have to remember to remain HUMBLE.
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Professor Litman says at Altimetry, he and his team value the work they put into their financial research. However, they’re also careful not to be too “proud” to reconsider their ideas.
He says they work to build an investing culture where everyone is focused not just on creating excellent outputs but also on enjoying the process that goes into their research.
He believes if he and his team “tap dance to work every day,” that joy will create the best possible environment for providing outstanding investment advice.
Take note of this personal life and investing tip!
Never let “pride” stand in the way of your portfolio. You’ll see, this will open up more opportunities for you to gain additional knowledge and grow your wealth in the long run.
(This article is from The Business Builder Daily, a newsletter by The I Institute in collaboration with MBO Partners.)
About The Dynamic Marketing Communiqué’s
“Wednesdays: The Independent Investor”
To best understand a firm, it makes sense to know its underlying earning power.
In two of the greatest books ever written on investing, the “Intelligent Investor” by Benjamin Graham and “Security Analysis” by David Dodd and Benjamin Graham (yes, Graham authored both of these books), the term “earning power” is mentioned hundreds of times.
LITERALLY.
Despite that, it’s surprising how earning power is mentioned seldomly in literature on business strategy. If the goal of a business is wealth creation, then the performance metrics must include the earning power concept.
Every Wednesday, we’ll publish investing tips and insights in accordance with the practices of some of the world’s greatest investors.
We make certain that these articles help you identify and separate the best companies from the worst, and develop your investing prowess in the long run.
Our goal?
To help you get on that path towards the greatest value creation in investing.
Hope you’ve found this week’s insights interesting and helpful.
Stay tuned for next Wednesday’s “The Independent Investor!”
Cheers,
Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
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www.valens-research.com
