Malinvestment: A Hidden Error Unveiled by Stressful Events

Malinvestment, as described by Haik and learned from Edward's book, is the erroneous use of money in investments. Warren Buffett's analogy of 'finding out who's been swimming naked when the tide goes out' illustrates that bad investments are revealed when tested by challenging circumstances, not immediately upon making the investment. It is similar to a construction flaw in a house which becomes apparent only during an earthquake. Malinvestment is not recognized as an error at the time of investment but surfaces when put under pressure by external events.