Money

Why ‘High Intelligence’ is a Handicap to Profitable Investing

“Our A students become professors. Our B students go to law school. Our C students rule the world.”

— Henry Rosovsky, Former Dean of Harvard College

In writing my monthly newsletter, Smart Money Masters, I get to look inside the minds of some of the world’s leading investors.

Although many of these folks are smart by most conventional measures, few, if any, of them are “Oh my God!” smart.

My best friend from high school had that kind of smarts. He became a theoretical physicist and has worked in an anonymous government lab for his entire life on projects he can’t discuss.

As it turns out, the world’s greatest investor agrees with this view of raw IQ as it applies to investing.

Warren Buffett has pointed out that you don’t need to brilliant to be a great investor. Buffett said:

“Success in investing doesn’t correlate with IQ once you’re above the level of 125. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.”

So in Buffett’s eyes, temperament rather than intelligence is key.

I will go a step further.

I believe that high intelligence is a hindrance to successful investing.

That’s because highly intelligent people want to be 100% right.  As a result, they have a tough time admitting that they are ever wrong.

Click here to read the rest of this article, “Why ‘High Intelligence’ is a Handicap to Profitable Investing.


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