Morgan Housel Explains the Lure of Pessimism

“Every past market crash looks like an opportunity, but every future market crash looks like a risk,” writes Morgan Housel in a recent blog for Collaborative Fund. Housel offers insights as to why investors tend to attach more to negative thoughts than to positive ones, why pessimism is more “seductive” than optimism. Pessimism, he writes, “can be hard to distinguish from critical thinking and is often taken more seriously than optimism, which can be hard… Read More

Housel Says Investing is Also an Art Form

A provocative article penned by Collaborate Fund’s Morgan Housel describes how investing, like many fields, embodies both art and science. “Investing,” he writes, “is maybe 60% science, the rest art.” Some investors, he argues, “obsess over brand and intangibles. Others say ignore those and only look at fundamentals. Neither is right or wrong.” Housel uses the example of Warren Buffett’s investment in Coca Cola, in which there were favorable fundamentals as well as the immeasurable… Read More

Housel on Competitive Advantage

Morgan Housel recently joined Collaborative Fund, a New York-based venture capital firm established in2010. In a blog posted earlier this month, he shares his insights on the importance of competitive advantage in business and offers five characteristics to ensure its sustainability: The ability to learn faster than your competition: “The world is filled with smart people,” writes Housel, who “tend to cling to what they learn, even while the world around them constantly changes.” He… Read More

Housel: Manager Communication with Investors is Key

“The most overlooked trait of investing success is communicating to your clients the softer and emotional side of investing,” writes Morgan Housel, partner at The Collaborative Fund and a former columnist at The Motley Fool and The Wall Street Journal. The premise of Housel’s blog post is that being a great investor is not necessarily the same as running a great investment firm, and that clients can’t benefit from advice or performance track records unless they “stick around.” Housel… Read More

Morgan Housel on Progress

As presidential candidates take swings at each other regarding the troubling state of the economy and what needs to change, it might be a good time to reflect on how far we’ve come. In a recent article for the Collaborative Fund, which provides capital for entrepreneurs, Morgan Housel offers an impressive account of our country’s accomplishments over the last century. The list covers everything from life span to medicine to auto fatalities and the number… Read More

Morgan Housel’s Farewell to Motley Fool

In his final column for the Motley Fool (posted August 30th), Morgan Housel reminisces about his early days and what he has learned in nine years with the multi-media financial services firm: Investment fees are falling. Investment costs are not. Housel writes that index fund fees now “round to zero. That’s a big win for investors. But the emotional cost of investing is as high as it’s ever been.” Most investment success boils down to… Read More

The Markets and Economy Under Past Presidents

There’s a tendency among the masses to judge our presidents on the state of the economy during their terms. However, says a recent article by Morgan Housel of The Motley Fool, jumping to conclusions based on four or eight years of an administration (both of which, he argues, are “blips”) may not be well-founded. “No matter who lives in the White House,” Housel writes, “business cycles come and go, the Federal Reserve flexes with unmatched… Read More

Think Twice before Listening to the Pessimists

During these post-Brexit days when hanging crepe seems to be the favorite pastime, one has to wonder why so many folks default to gloom-and-doom scenarios. Morgan Housel of The Motley Fool explains it this way: “Pessimism isn’t just more common than optimism, it also sounds smarter.” When it comes to investing, Housel differentiates between perceptions of those that are bullish and those that are bearish. He argues that a bull sounds like a “reckless cheerleader”… Read More

The Fool’s Housel on Brexit: Hurry Up and Wait

Thursday’s vote by the U.K. to leave the European Union has precipitated a host of commentary across countless channels. Last Friday, Morgan Housel of The Motley Fool offered frank advice about what investors should be doing. And that is…nothing. By voting to leave the EU, Housel says, the U.K. has ceded to France its title as the world’s fifth largest economy. But as far as The Motley Fool is concerned, the path is clear. “We’re… Read More

How Current and Future Expectations Influence Stock Prices

Company performance and stock price performance, or outcomes, don’t always go hand and hand. In a very good article, Morgan Housel, economics and finance columnist for The Motley Fool, points out that predicting the future for stocks is harder than most people think. The performance of stocks are a function of future fundamentals (i.e. earnings and growth), but also “by performance within the context of expectations”. As Housel points out, one may actually predict future performance… Read More