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Jason Zweig: Temperament Is Everything for Most Investors

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Jun 29, 2021

Guest

Jason Zweig

Jason Zweig, a Wall Street Journal personal finance columnist and author, dives into the psychology of investing. He argues that temperament is more crucial than intelligence for investment success, emphasizing self-control and the avoidance of self-delusion. Zweig critiques the meme stock phenomenon as both cyclical and novel, and discusses the pitfalls of free trading. He also recommends clear communication for young investors and highlights the importance of simplicity in retirement income strategies.

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insights

INSIGHT

Pandemic Trading Mania Is Both Old And New

Speculative mania during the pandemic combines late-cycle behavior with new structural forces like easy trading and boredom.
Jason Zweig hopes reopening the economy will dampen unhealthy trading fervor.

insights

INSIGHT

True Expertise Means Updating Beliefs

Expertise includes changing your mind when new information arrives, not feigning certainty.
People confuse consistency with knowledge and distrust experts who update beliefs.

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ADVICE

Define 'Investor' And Teach Core Principles

Stop calling every trader an investor and teach the difference clearly to new market participants.
Replace short-term stock market games with curriculum on compounding and behavioral finance.

Get the Snipd Podcast app to discover more snips from this episode

Is the Meme Stock Phenomenon New or Cyclical?

01:41 • 2min

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What Does Expertise Mean Today?

03:20 • 3min

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How Can Young Speculators Become Long-Term Investors?

06:26 • 4min

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Has Free, Easy Trading Been a Net Positive?

10:51 • 3min

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Why Speculation Persists Across Countries

13:47 • 3min

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Why Temperament Trumps Intelligence for Most Investors

16:57 • 5min

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ETFs vs. Traditional Index Funds: Tradeoffs

21:47 • 5min

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How Should Retirees Generate Income with Low Yields?

26:20 • 3min

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Do We Need Simple Retirement Income Solutions?

29:11 • 3min

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Would a Uniform Fiduciary Standard Help Consumers?

32:27 • 3min

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Will Financial Advisor Fees Fall?

35:05 • 3min

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Which Advisor Fee Model Makes Sense for Consumers?

37:45 • 2min

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Can People Manage Their Own Financial Lives?

39:26 • 3min

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Why Is Thick Skin Important and Can It Be Developed?

42:31 • 4min

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What Books Have Impressed You Recently?

46:50 • 3min

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What Weekly Reads and Podcasts Does Jason Follow?

• Mentioned in 9 episodes

Your Money and Your Brain

How the New Science of Neuroeconomics Can Help Make You Rich

Jason Zweig

#21

• Mentioned in 282 episodes

The Psychology of Money

Timeless Lessons on Wealth, Greed, and Happiness

Morgan Housel

In 'The Psychology of Money,' Morgan Housel delves into the psychological and emotional aspects of financial decisions. The book consists of 19 short stories that illustrate how personal history, worldview, emotions, and biases influence financial outcomes. Housel emphasizes the importance of behavior over knowledge in managing money, highlighting the power of compounding, the dangers of greed, and the pursuit of happiness beyond mere wealth accumulation. He advocates for a frugal lifestyle, long-term perspective, and a balanced approach to investing, stressing that financial success is more about mindset and discipline than about technical financial knowledge.

#14753

• Mentioned in 3 episodes

The devil's financial dictionary

Jason Zweig

#24766

• Mentioned in 2 episodes

Palace Walk

Naguib Mahfouz

Palace Walk is a novel by Naguib Mahfouz that follows the life of al-Sayyid Ahmad Abd al-Jawad, a strict patriarch, and his family in Cairo during the period between World War I and the Egyptian Revolution of 1919. The novel delves into themes of power, tradition, and cultural change against the backdrop of colonial Egypt. It introduces readers to a complex family dynamic, where each character navigates personal desires and societal expectations amidst political upheaval.

#1589

• Mentioned in 19 episodes

Life and Fate

Vasily Grossman

Written in 1959, 'Life and Fate' is a monumental novel that narrates the story of the Shaposhnikov family during the Great Patriotic War. The novel is set against the backdrop of the Battle of Stalingrad and delves into the lives of numerous characters, including Soviet physicist Viktor Shtrum, who grapples with anti-Semitism and moral dilemmas in a totalitarian state. The book juxtaposes the horrors of war and the Gulag with the intimate lives of its characters, exploring profound philosophical and moral questions. Despite its initial suppression by the KGB, the novel was eventually smuggled out of the Soviet Union and has since been recognized as one of the greatest Russian novels of the 20th century.

#49

• Mentioned in 183 episodes

The intelligent investor

Jason Zweig

Benjamin Graham

Written by Benjamin Graham, 'The Intelligent Investor' is a seminal work on value investing that has inspired millions since its original publication in 1949. The book emphasizes the importance of distinguishing between investing and speculation, calculating the intrinsic value of companies, and maintaining a margin of safety. The revised edition includes updated commentary by Jason Zweig, who provides modern examples and insights to help readers apply Graham's principles in today's market. Warren Buffett, a disciple of Graham, has praised the book as 'the best book about investing ever written'.

Our guest on the podcast this week is The Wall Street Journal columnist and author Jason Zweig. Jason became a personal finance columnist for The Wall Street Journal in 2008. His weekly column, “The Intelligent Investor,” is a must-read for people inside and outside of the investment industry. Jason is also the editor of the revised edition of Benjamin Graham's The Intelligent Investor. And he is the author of Your Money and Your Brain, which explores the neuroscience of investing. He also wrote the Devil's Financial Dictionary, which is a satirical glossary of Wall Street.

Background

Bio

Jason’s twitter handle: @jasonzweigwsj

Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich

The Devil’s Financial Dictionary

Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel

Life and Fate by Vasily Grossman

Palace Walk: The Cairo Trilogy by Naguib Mahfouz

The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness by Morgan Housel

Matt Levine, Bloomberg Opinion Columnist

Jesse Livermore, Philosophical Economics

Nick Maggiulli, Ritholtz Wealth Management

Michael Batnick, Ritholtz Wealth Management

Ben Carlson, Ritholtz Wealth Management

Joe Weisenthal, Bloomberg

Tracy Alloway, Bloomberg

Robin Wigglesworth, Financial Times

Research Institute: Credit Suisse Global Investment Returns, Yearbook 2021 Summary Edition

Georgarakos, D. & Pasini, G. 2011. “Trust, Sociability and Stock Market Participation,” Review of Finance, Vol. 15, No. 4, P. 693.

Thinking, Fast and Slow by Daniel Kahneman

“Investment Policy and the Competent Stranger,” speech by Charles D. Ellis, empireclub.org, April 7, 1988.

Feynman, R.P. 1974.“Cargo Cult Science,” Engineering and Science.

Bogleheads

Investing

“Stock Market 101: Teaching the Wrong Lessons?” by Jason Zweig, Jasonzweig.com, May 8, 2015.

“How to Keep Your Cool When Markets Are Sizzling,” by Jason Zweig, wsj.com, April 23, 2021.

“Why You Shouldn’t Buy Bitcoin When You’re Hungry,” by Jason Zweig, wsj.com, May 21, 2021.

“You Can’t Invest Without Trading. You Can Trade Without Investing,” by Jason Zweig, wsj.com, June 18, 2021.

“Robinhood Trader’s Battle Cry: ‘It’s All Just a Game to Me,' " by Jason Zweig, wsj.com, March 26, 2021.

“Jason Hsu: China Is ‘the Last Great Remaining Alpha Reservoir,' " The Long View Podcast, morningstar.com, April 20, 2021.

ETFs and Index Funds

“The Stock Got Crushed. Then the ETFs Had to Sell,” by Jason Zweig, Jasonzweig.com, Jan. 31, 2020.

“The Story Behind the Market’s Hottest Funds,” by Jason Zweig, wsj.com, Jan. 15, 2021.

“ETFs: What They Are and How They Can Fit Into Your Investment Portfolio,” by Jason Zweig, wsj.com, May 20, 2021.

Retirement

“Jason Zweig’s Proposal to Scrap 401(k)s,” by John Rekanthaler, Morningstar.com, Feb. 26, 2019.

“Wishful Thinking in a World Without Yield,” by Jason Zweig, wsj.com, June 18, 2021.

“The Safe, High-Return Trade Hiding in Plain Sight,” by Jason Zweig, wsj.com, May 28, 2021.

“The Funds That Make You Buy Low and Sell High,” by Jason Zweig, wsj.com, Aug. 30, 2019.

Financial Advice

“The Intelligent Investor: Saving Investors From Themselves,” by Jason Zweig, wsj.com, July 1, 2013.

“The First Line of Investing Defense? You,” by Jason Zweig, wsj.com, March 8, 2019.

“Looking for a Financial Planner? The Go-To Website Often Omits Red Flags,” by Jason Zweig and Andrea Fuller, wsj.com, July 30, 2019.

“Financial Advisor Fee Trends and the Fee Compression Mirage,” by Michael Kitces, kitces.com, Feb. 8, 2021.

“Want to Get Rich Quick? Who Can Stop You?” by Jason Zweig, wsj.com, May 7, 2021.

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