The Morgan Housel Podcast The Long Run Is Just A Collection of Short Runs
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May 13, 2024 Explore the fascinating dance between short-term strategies and long-term investment goals. Delve into how managing immediate desires can lead to better future rewards, illustrated by the marshmallow test. Discover the critical role of cash reserves in safeguarding against market fluctuations and ensuring sustainable growth. The discussion emphasizes that embracing short-term realities is essential for achieving lasting success in the ever-shifting financial landscape.
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Balance Short-Term and Long-Term
- Don't take the idea of ignoring the short-term too far in investing.
- Manage the short-term effectively to ensure long-term success.
Marshmallow Test Analogy
- Kids in the marshmallow test succeeded by distracting themselves in the short term.
- This highlights the importance of managing the short term to achieve long-term goals.
Housel's Cash Strategy
- Morgan Housel holds more cash than most advisors recommend, prioritizing long-term holding over short-term returns.
- He calculates the potential cost of forced selling during downturns, which could exceed the opportunity cost of holding cash.