In the mid-eighties I took one of those personality tests that determine what type of person you are, what your strengths and weaknesses are and what type of career you’d be suited for. The results were not too surprising: I was basically a pretty normal person, pretty good at math, probably never going to be a great artist or preacher.
But then, at the end of the session, the person giving me the results told me something that has turned out to be one of the most important pieces of information that I have ever received in my life. It was this:
Dave, you can’t tell when people are lying to you.
What? You mean I can’t tell by looking directly into someone’s eyes and monitoring their body language whether they are telling me the truth? Exactly.
And you know what? Neither can you.
Think about it. Ever watched a great actor in a movie? There are great actors all around us each and every day. The problem is that some of them want to rip us off.
I was fortunate enough to learn this lesson in my twenties and it has stood me in good stead when it comes to investing, as well as life in general. I don’t assume everyone I meet is lying to me. For example, I have known my buddy Stu for over thirty years and I know I can trust him because he has never once lied to me.
On the other hand, I initially do not trust people I meet for the first time, even if they have been referred by a friend or client.
Unfortunately, many people did not take the ...