Monday, July 29, 2024

Money and intelligence - there may not be a connection



Galbraith says “the specious association of money and intelligence.” When people get rich, others take that to mean they’re smart. And when investors succeed, it’s often assumed their intelligence can lead to similarly good results in other fields. Further, successful investors often come to believe in the strength of their own intellect and opine about fields with no connection to investing.  - "The Folly of Certainty" Oaktree Howard Marks 

Another relevant quote is associated with D McCloskey, which she calls the American Question,"If you are so smart why aren't you smart, and the retort, "If you are so rich why aren't you smart." See "The Limits of Expertise".

There may not be an association between brains and financial success. There is a minimum amount of intelligence that is needed, but there are other skills more important like tolerance for risk, the ability to be disciplined, and the ability to sift through many facts, or perhaps the most important skill of being humble and accept that you may often be wrong. 

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