Trying Too Hard
The Morgan Housel Podcast
Morgan Housel
4.9 • 1.1K Ratings
🗓️ 18 September 2023
⏱️ 14 minutes
🧾️ Download transcript
Summary
A truth that applies to almost every field is that it’s possible to try too hard, and when doing so you can get worse results than those who knew less, cared less, and put in less effort than you did.
There are mistakes that only an expert can make. Errors – often catastrophic – that novices aren’t smart enough to make because they lack the information and experience needed to try to exploit an opportunity that doesn’t exist.
Transcript
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| 0:00.0 | Welcome back. I took a couple weeks off, but it's good to be back here. I've always thought that investing is one of the few fields in the world in which it is |
| 0:17.2 | possible to try too hard and is actually very common that people try too hard. |
| 0:30.0 | People's normal inclination is that if you want to do better at something in life, you try harder, you practice more, you put in more effort. And in most areas of life, that's true. That's the proper mindset that you want. |
| 0:35.0 | I just think there's so much evidence that it's not like that in investing. |
| 0:39.0 | Like the proper amount of intelligence that you want is like an upside down you. |
| 0:44.4 | It's possible to be too smart in investing to try too hard and in a way that's going to come |
| 0:50.1 | back to haunt you. |
| 0:51.9 | My old colleague Bill Mann has his phrase that I love. |
| 0:55.1 | During the financial crisis in 2008 he said a lot of the problems that were happening were |
| 1:00.0 | what he called Harvard Stupid and he called Harvard Stupid. |
| 1:08.0 | And he defined Harvard Stupid as mistakes that only somebody who is extremely well educated and has a natural propensity to complicate things and has a huge ego might make. You know, blowing up your bank with a trillion dollars of |
| 1:17.2 | derivatives is not something that somebody who went to community college could ever do. Like you need a certain level of intelligence to make that kind of mistake. |
| 1:26.1 | So this is this idea that it's possible to try too hard. I see it all the time in investing. |
| 1:31.1 | But I think it actually applies to a lot of areas in life. And it's so easy to to a lot of areas in life. |
| 1:34.0 | And it's so easy to overlook. |
| 1:37.0 | So let me tell you a story or two |
| 1:39.0 | about how it's possible to try too hard. |
| 1:48.0 | Thomas McCray was a young 19th century doctor who was still unsure of his skills. One day he diagnosed a patient with a common and insignificant stomach ailment. |
| 1:57.0 | Thomas McCrae's medical school professor watched the diagnosis and he interrupted with every student's nightmare. |
| 2:04.4 | The professor said in fact this patient had a very rare and very serious disease. |
| 2:10.2 | Thomas McCray had never heard of this disease before. |
| 2:14.0 | The professor's diagnosis required immediate surgery, |
... |
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