The stock market is filled with individuals who know the price of everything, but the value of nothing. Prices are set at the margin by the most motivated seller and the most motivated buyer — and neither is representative of rational long-term value.
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In Brazil, the top five banks have over 80% market share, and they've had that for over 30 years. The average Brazilian pays 30 times more for banking than the average American. And the return on equity of these banks is among the highest in the world — so they were making enormous profits by charging customers enormous fees.
Invest Like the Best with Patrick O'Shaughnessy
Stories are how we make sense of the world, how we communicate with each other, and how we understand ourselves. But stories can also mislead us, by making the world seem more coherent and predictable than it really is.
Hidden Brain
Intelligence is probably the thing people spend the most time thinking about in this business, and I think it's one of the least important factors in long-run success. The returns to intelligence are just not that high in investing, and the reason is that markets are pretty efficient.
Invest Like the Best with Patrick O'Shaughnessy