Money management

These days, think about all those money managers who basically copy everything Warren Buffett says. They might talk like Buffett and use his exact words, but here's the thing - they have absolutely no clue how to actually invest the way he does! They're just copying what sounds good. That’s also why it’s so hard to tell a truly excellent money manager from someone who’s simply good at spouting the appropriate jargon.

So how do you distinguish between the real McCoy and someone who’s just performing?

But I discovered this: real competence is earned via years of hands-on experience, not by memorizing someone else’s playbook. When people are only repeating things, they never really know what they really mean. They’ve only begun to understand. So as soon as you begin pressing them about specifics, basic principles or those difficult scenarios that don’t quite suit the textbook examples, they fall to pieces and give you these vague, unhelpful answers.

Most of us learn about things not from reading the original research or listening to the real experts, but from reading watered-down versions designed to be readily and quickly spread. Do you stop and think how different it is to read a serious academic study and to scan through a summary in a newspaper? But these popularizers know a lot more than the average person, and yet even they themselves are not the true experts. Their way of making the sophisticated sound easy and unforgettable is fantastic. So, we easily confuse these great communicators with the true experts. That’s why you have to watch out for this when you’re looking for real expertise: the person who really knows what they’re talking about is rarely the same person who made the issue fashionable or renowned.

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