Standard Stupidities

StanStu #1: Cash on the Sidelines

Global stock markets currently hover around all-time highs, last year’s performance was tremendously good, and interest rates are back. No wonder that the media and market strategists recently began to spread an old narrative – the idea of Cash on the Sidelines.

The most fundamental feature of markets and a little thinking effort easily destroys the narrative as it is commonly used. But let’s go through it step-by-step…

  • The Narrative of Sidelines
  • The Problem of Sidelines
  • Perspectives Matter
  • Investor-Specific Sidelines
  • The Psychology of Sidelines

Read the Full Post

Standard Stupidities: Introduction

It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.

Other people are trying to be smart. All I’m trying to be is non-idiotic. I find that all you have to do to get ahead in life is to be non-idiotic and live a long time. It’s harder to be non-idiotic than most people think.

Charlie Munger Quotes from Chapter 8 of Green (2021)

What is a Standard Stupidity? For me, it is a situation or problem with a clear rational solution which many people still screw up massively.

There is a large supply of Standard Stupidities in investing and I am looking forward to disentangle some of them in this series.

Read the Full Post