On Being a Cynic

By nature, I am an optimist, or at least I hope I am….

However, most of my thoughts expressed here tend to be highly critical, slightly cynical and somewhat pessimistic. Investing is a negative art. You seek to avoid losses, so you consistently look for things that could go wrong.  Being highly cynical and somewhat distrusting is useful in this business.

Being an optimist is helpful when you are starting a business.  You need to believe that the business will succeed, otherwise, why put so much effort into it?  However, when you are thinking about buying a piece of a company, thinking about what can go wrong tends to be more useful than dreaming about how you will one day be flying private when all the projections come true.

A word of caution born out of personal experience: such a cynical and skeptical attitude is less useful in marital matters….

I will be on the lookout for  good things to write about in the near future, but I doubt there will be any…

 

 

 

 

More to Explore

Returns for Great vs. Bad Businesses

Munger and The Cattle Rancher

Munger’s ability to find great businesses is directly related to his ability to consistently discard bad businesses. He is excellent at inverting, and discarding the bad businesses as quickly as possible.

The Abominable No-Man and Bad Management

Some investors think a business is good, but know that management is bad.  These investors justify the investment based on the idea that the great price of the business is worth the bad management. This is akin to marrying a supermodel who is going to yell at you all day.  Whatever pleasure your eyes may derive from the marriage, your ears will endure a greater amount of pain in the long run. The pocketbooks of those partnering with bad management are likely to see a similar 50%+ decline in their net worth.

This Post Has One Comment

  1. Amen.

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