RWH037: Celebrating Charlie Munger w/ Mohnish Pabrai, Tom Gayner, Joel Greenblatt, & Chris Davis
We Study Billionaires - The Investor’s Podcast Network
The Dangers of Delusion and Wrong Incentives in the Financial Industry
The financial industry is trapped in a system where ineffective approaches persist due to unwillingness to change. Finance professors and professionals tend to resist alternative approaches that challenge their existing methods. The influence of incentives and self-interest often leads individuals to convince themselves that their approach is right, even when evidence suggests the contrary. This resistance to change can lead to overconfidence and the propagation of false beliefs. Charlie emphasizes the importance of incentives being aligned and fair, particularly for investors entrusting their money to others. He advocates for a brutally rational approach to confront uncomfortable truths and avoid deluding ourselves into thinking we're adding value when we're not.
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