Morgan Housel and his wife needed a house. It was June 2016, and they had agreed they wouldn’t make an emotional decision on one of life’s most significant commitments. This would be their first home, where they’d celebrate Christmas morning and welcome friends to backyard barbeques. Their son was about six months old. Being patient, they decided, would be critical to their search. No emotional home buying. No impulse moves.
After they saw a house on Zillow that looked nice, they drove up to the driveway to tour the property. “Wow, I love it,” his wife said. “We’re like, oh my God, it’s perfect,” Housel recalls. “We told each other, ‘We have to buy this house right now.’”
“I love this as an example of even when you think you’re an unemotional person and you go out of your way to say you’re not going to be emotional, some things are emotional,” Housel says. “You shouldn’t pretend housing or children, or money isn’t emotional. So much of investing isn’t a spreadsheet, it’s emotion.”
Housel, a partner at The Collaborative Fund and former columnist at The Motley Fool and The Wall Street Journal, published his international bestseller, The Psychology of Money, in 2020. The book is 19 short stories exploring how people think about money and how to make better sense of one of life’s most important topics. In two and a half years, it has sold over 3 million copies. Oaktree’s Howard Marks says Housel’s “observations often hit the daily double; they say things that haven’t been said before, and they make sense.” Author James Clear said, “Everyone should own a copy.”
Early this month, we spoke with Housel out of his Seattle-area home about the timeless lessons from his book, what he’s learned studying the best investors, and some of his favorite mental models to better orient yourself around markets. Spoiler: He has a new book coming out this fall. This special edition interview of Signal From Noise is edited lightly for clarity.
Let’s start with time horizons. The average holding period for U.S. stocks was about 10 months in 2022, down from more than five years in the mid-1970s. Why is it hard to be patient with our investments?
I think a big part of this is that so many people say they’re in for the long term, but the long term is just a series of short terms you must experience and endure. It’s like standing at the base of Mount Everest and saying, that's where I'm going, to the top. That’s great, but now you must hike up the mountain daily, dealing with market volatility. Some investors do themselves a disservice when they say, “I’m in it for the long run. I don’t have to think about the short run.” No, you must think about the short run, you still have to experience it.
What is FS Insight?
FS Insight is a market-leading, independent research boutique. We are experts in U.S. macro market strategy research and have leveraged those fundamental market insights to become leading pioneers of digital assets and blockchain research.
Tom Lee's View
Proprietary roadmap and tools to navigate and outperform the equity market.
Macro and Technical Strategy
Our approach helps investors identify inflection points and changes in equity leadership.
Deep Research
Our pioneering research provides an understanding of fundamental valuations and risks, and critical benchmarking tools.
Videos
Our macro and crypto videos give subscribers a quick and easy-to-understand audiovisual updates on our latest research and views.
US Policy Analysis
Our 40-year D.C. veteran strategist cuts through the rhetoric to give investors the insight they need.
