IT ALL STARTED WITH NOT BECOMING A PHILOSOPHER
It all started back 15+ years ago when I was an assistant teacher of metaphysics and theory of science at my alma mater. I had aced my graduate degree in analytical philosophy with a 4.0 GPA and was enroute to begin PhD studies. The only problem was that I had spent the last few years in the library contemplating the relationship between theory and practice and to be honest I wasn’t quite looking forward to a life that pretty much promised more of the same. Also the irony of considering ‘practical knowledge’ from the viewpoint of a library wasn’t lost on me.
My library window at University of Aarhus, my Alma Mater, where I studied practical knowledge for years. Yes: the irony is tangible. (And before you say... 'University of... where?': it's in Denmark. And ranked 98th globally).
More importantly: I had realised that I had a burning desire to get rich. I don’t know exactly from where it came and it definitely didn’t have a lot of direction back then, but it was real. I was reading about, talking about and thinking about money all the time. It was driving my wife Sally crazy (much more about her later) to the point where I had begun getting up at 4am to read for a few hours and then sneak back into bed at 6:30 so she wouldn’t know (she knew of course.). I read 100+ books a year. I wanted to know _everything_ about business, money and investing.
6 YEARS LATER : TO HARVARD AND BEYOND
I respectfully declined the PhD and became an entrepreneur instead. 6 years later I had sold my first business: a media and conference company that did commercial real estate analysis in a handful of countries in Northern Europe. Having some financial freedom at this point (though still not rich) Sally and I decided to see if we’d missed out on something and enrolled in a few classes at Harvard University, one of them being “Judgement and Decision Making” that taught the basics of modern decision theory, behavioural economics and how our own cognitive setup works (or doesn’t). This was a major turning point for both of us.
Sally ended up teaching that class at Harvard a few years later, having re-focused her successful consultancy business on helping large corporations design and implement better decision processes (check it out at www.BehaviouralStrategy.com). I ended up continuing to study a MA in Finance at Harvard and refocused my efforts as an entrepreneur into that of an investor.
BRINGING IT ALL TOGETHER
I became obsessed with figuring out what works in investing. And why it works. And why most normal investors fail while a select handfull of investors seem to be consistently doing very well for themselves. I read everything Warren Buffett had ever written. All the biographies about him. About Charlie Munger. And Walter Schloss . And Howard Marks. Benjamin Graham. Phil Fisher. Joel Greenblatt. And… - you get the idea: I was back in research mode. Combining the structural high level thinking from philosophy with my years in the trenches as a business operator and everything I could find about the value investing approach.
But I also added another crucial piece to my investing framework: the fact that we’re human and lead human lives. Have human minds. Get moved by human emotion. Have dreams. Ambition. Pride. All locked within our own uniquely human biological body that needs food and sleep and really doesn’t want to spend precious brain calories thinking too hard about anything but would likely much rather barbecue with friends in the garden. Any investing approach, it seemed to me, had to acknowledge that.
YES, YES : BUT WHAT DO YOU GET HERE?
So on this blog you’ll get my thinking and framework on how to integrate value investing with psychology and behavioural finance to craft an investing process that brings out the best of your thinking while stacking the long term odds of investing success in your favour.
My belief is that this can and should be done while keeping investing enjoyable, curiosity driven and fun. If your investing is making you miserable, fearfull or anxious you’re not doing it right. So we fix that too here on TIP. We have to.
WHERE TO BEGIN
I recommend starting by reading the framework. Then, if you liked that, you can browse the articles to find some of the things that will be particular to your situation. If you don’t find something that helps you, please write me at once at firstname.lastname@example.org and I’ll see what I can do. If you do find stuff that is useful or entertaining to you you can subscribe and I'll send you more stuff as I write it.
So: the fountain of knowledge flows freely. Jump in and enjoy.
Ulrik Lehrskov-Schmidt, chief TIP'er
P.S. Some of my other driving forces in life is food (I owned a brewery once!), raising my two sons to be decent human beings and Denmark (where Sally and I live most of the time).