{"id":2577,"date":"2022-03-14T23:56:00","date_gmt":"2022-03-14T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=2577"},"modified":"2025-11-24T10:40:53","modified_gmt":"2025-11-24T02:40:53","slug":"too-high-iq-is-not-useful-in-investment-but-will-hinder","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2022\/03\/14\/too-high-iq-is-not-useful-in-investment-but-will-hinder\/","title":{"rendered":"Too high IQ is not useful in investment, but will hinder"},"content":{"rendered":"\n<p>Then, I&#8217;m pretty sure. &#8220;Most people don&#8217;t want to admit that they&#8217;re not very smart, they just think they&#8217;re smart.&#8221; In addition, please refer to my other blog post &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/11\/25\/why-people-with-high-iq-prone-invest-failed\/\" data-type=\"URL\" data-id=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/11\/25\/why-people-with-high-iq-prone-invest-failed\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why people with high IQ prone invest failed<\/a>&#8220;, you will understand better that high IQ is not necessary in investing.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/03\/14\/too-high-iq-is-not-useful-in-investment-but-will-hinder\/#Newtons_heartfelt_words\" >Newton&#8217;s heartfelt words<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/03\/14\/too-high-iq-is-not-useful-in-investment-but-will-hinder\/#Keynes_became_a_master\" >Keynes became a master<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/03\/14\/too-high-iq-is-not-useful-in-investment-but-will-hinder\/#What_did_Buffett_say\" >What did Buffett say<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/03\/14\/too-high-iq-is-not-useful-in-investment-but-will-hinder\/#The_experience_of_Peter_Lynch\" >The experience of Peter Lynch<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/03\/14\/too-high-iq-is-not-useful-in-investment-but-will-hinder\/#Strange_behavior_patterns_of_people\" >Strange behavior patterns of people<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/03\/14\/too-high-iq-is-not-useful-in-investment-but-will-hinder\/#Charlie_Munger_put_it_most_directly\" >Charlie Munger put it most directly<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/03\/14\/too-high-iq-is-not-useful-in-investment-but-will-hinder\/#Human_temperament_determines_success\" >Human temperament determines success<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/03\/14\/too-high-iq-is-not-useful-in-investment-but-will-hinder\/#Not_so_many_smart_people_in_this_world\" >Not so many smart people in this world<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/03\/14\/too-high-iq-is-not-useful-in-investment-but-will-hinder\/#Related_articles\" >Related articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Newtons_heartfelt_words\"><\/span><strong>Newton&#8217;s heartfelt words<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Isn&#8217;t Newton a smart enough man! In the famous stock book &#8220;Extraordinary Popular Delusions and the Madness of Crowds&#8221;. Newton\u2019s own words from the bottom of his heart are recorded, &#8220;I can calculate the motion of heavenly bodies, but not the madness of people.&#8221;&nbsp; During the &#8220;South China Sea&#8221; bubble more than 300 years ago, Newton also entered the market and bought the shares. <\/p>\n\n\n\n<p>After the stock rose, he sold the stock and made money. However, the shares went up all the way. He couldn&#8217;t resist the temptation. He regretted selling it too early, so he entered the market and bought again. In the end, he was almost wiped out what he earned during the bubble three centuries ago, and lost all the money he had earned from the stock market.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Keynes_became_a_master\"><\/span><strong>Keynes became a master<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>When Keynes was young, relying on his intelligence, understanding of the economy, finance, and the world situation, familiar contacts, and the government&#8217;s financial policies, he had a youthful, unruly, typical young man and high IQ. Typically an arrogant characteristics of people. When he was young, he used top-down oriented, standard subjective stock selection, thinking that he was already familiar with all the operating rules of the world, and was able to grasp all the pulses of the world, and all the determinants of the stock market were inhis own understanding. <\/p>\n\n\n\n<p>The result is that he can only make a small amount of money and miss opportunities over and over again. As he get older, he changed completely different understanding of life and investment, and gradually change to long-term investment, concentrated investment, and pay attention to the intrinsic value of a company. His achivements in investment is almost equal achievements in academics.<\/p>\n\n\n\n<p>Even Buffett has repeatedly admitted that his investment philosophy was greatly influenced by Keynes. Buffett also suggested that investors must read Chapter 12 The State of Long-Term Expectation in the book &#8220;General Theory of Employment, Interest and Currency&#8221; by John Maynard Keynes. He believes that this chapter is as important and powerful as Chapter 8 The Investor and Market Fluctuations and Chapter 20 Margin of Safety in the book &#8220;The Intelligent Investor&#8221;&nbsp;by Benjamin Graham.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_did_Buffett_say\"><\/span><strong>What did Buffett say<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In the world of investment, too high an IQ is useless.  The success of investment depends on personality, not IQ. A good personality always trumps a high IQ. Like Buffett said &#8220;Success in investing doesn\u2019t correlate with I. Q. once you\u2019re above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.&#8221; &#8220;Success in investing doesn&#8217;t correlate with IQ \u2026 what you need is the temperament to control the urges that get other people into trouble in investing.&#8221; &#8220;You don&#8217;t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ\uff02<\/p>\n\n\n\n<p>In his <a href=\"https:\/\/berkshirehathaway.com\/letters\/2006ltr.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">2006 shareholder letter<\/a>, Buffett wrote: &#8220;Temperament is also important. Independent thinking, emotional stability, and a keen understanding of both human and institutional behavior is vital to long-term investment success. I\u2019ve seen a lot of very smart people who have lacked these virtues.&#8221;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_experience_of_Peter_Lynch\"><\/span><strong>The experience of Peter Lynch<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Peter Lynch once said that when it comes to investing, &#8220;Philosophy and logic are more important than&nbsp;math&nbsp;or finance in picking&nbsp;stocks.&#8221;<\/p>\n\n\n\n<p>In his book, Peter Lynch repeatedly warned investors that they must invest within their own circle of ability to succeed. He cited countless examples to show that a bunch of medical doctors are not investing in the medical and health care industries that they are familiar with. Instead to invest in a small oil company that deliberately wants to get rich overnight and invests in oil drilling and exploration like a gambling, hoping that the companies it invests in will announce the emergence of oil from the ground tomorrow, which will increase the stock price several times a day.<\/p>\n\n\n\n<p>Keynes put it more aptly &#8220;just like a doctor shouldn&#8217;t operate on himself.&#8221;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Strange_behavior_patterns_of_people\"><\/span><strong>Strange behavior patterns of people<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>This is what I pointed out in the first chapter , section 1-1 of my book &#8220;The Rules of Super Growth Stocks Investing&#8221;, &#8220;Humans are born with a complicated and difficult to understand behavior pattern. People tend to complicate easy things, and most people adopt these simple and proven successful investment principles that have been made public or have already been actually verified; instead, they are doing everything they can to find complex, unproven, and failure methods that countless people have experienced, and they are desperate to invest. Even if I fail, I don\u2019t regret it.&#8221;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Charlie_Munger_put_it_most_directly\"><\/span>Charlie Munger put it most directly<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>&#8220;<em>Many people<\/em>&nbsp;with&nbsp;<em>high IQs<\/em>&nbsp;are&nbsp;<em>bad investors because<\/em>&nbsp;of&nbsp;<em>their character flaws<\/em>&#8221; Munger said.<\/p>\n\n\n\n<p>Charlie Munger put it more directly: &#8220;I think good character is more important than the brain. You must strictly control those irrational emotions. You need to be calm, self-disciplined, and be indifferent to loss and misfortune. Likewise, you must not be overwhelmed by ecstasy.&#8221;<\/p>\n\n\n\n<p>The reason is as Munger said: &#8220;<em>Smart<\/em>,&nbsp;<em>hard<\/em>-working&nbsp;<em>people<\/em>&nbsp;aren&#8217;t exempt from professional&nbsp;<em>disasters<\/em>&nbsp;resulting from.&#8221;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Human_temperament_determines_success\"><\/span><strong>Human temperament determines success<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The traits required by investors: time, perseverance, insight, discipline, patience, knowing one\u2019s own circle of abilities, and the courage to be different are much more important than high IQ or showing off cleverness; but most people I don&#8217;t believe this, and don&#8217;t think it is important.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"140\" height=\"160\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2022\/09\/s-1600x1200-2.jpg\" alt=\"iq\" class=\"wp-image-13844\"\/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Not_so_many_smart_people_in_this_world\"><\/span><strong>Not so many smart people in this world<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>But there are actually not so many so-called high IQ or smart people in this world, especially in the stock market. Most smart people just think they are. The world of investment is complicated then people think, and you will know it at the first try. This is why  George Goldman (pseudonym Adam Smith) said, &#8220;If you don\u2019t know who you are, the stock market is an expensive place to find out.&#8221;<\/p>\n\n\n\n<p>If IQ decides to invest in achievements, aren&#8217;t all the people who are listed as &#8220;<a href=\"https:\/\/www.us.mensa.org\/learn\/about\/#:~:text=Mensa%20members%20range%20in%20age,an%20accepted%20standardized%20intelligence%20test.\" data-type=\"URL\" data-id=\"https:\/\/www.us.mensa.org\/learn\/about\/#:~:text=Mensa%20members%20range%20in%20age,an%20accepted%20standardized%20intelligence%20test.\" target=\"_blank\" rel=\"noreferrer noopener\">Mensa members<\/a>&#8221; in the world are monopoly? In fact, this is not the case!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Related_articles\"><\/span>Related articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/11\/25\/why-people-with-high-iq-prone-invest-failed\/\" data-type=\"URL\" data-id=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/11\/25\/why-people-with-high-iq-prone-invest-failed\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why people with high IQ prone invest failed<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/03\/14\/too-high-iq-is-not-useful-in-investment-but-will-hinder\/\" target=\"_blank\" rel=\"noreferrer noopener\">Too high IQ is not useful in investment, but will hinder<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/09\/14\/behavior-bound-to-fail\/\" target=\"_blank\" rel=\"noreferrer noopener\">List of behaviors that are bound to fail when investing in stocks<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/05\/07\/why-successful-manager-usually-not-a-good-investor\/\">Why successful manager usually not a good investor? <\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/05\/02\/why-the-successful-skills-needed-for-stock-investment-is-opposite-of-successful-workplace-skills\/\">Workplace skills doesn&#8217;t help much in investment<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Too high IQ is not useful in investment, but will hinder-because &#8220;Most people don&#8217;t want to admit that they&#8217;re not very smart, they just think they&#8217;re smart.&#8221; <\/p>\n","protected":false},"author":1,"featured_media":13844,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[66,8,42,43,11],"tags":[],"class_list":["post-2577","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-successful-investor-traits","category-investing-books","category-john-maynard-keynes","category-peter-lynch","category-buffett"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/2577","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=2577"}],"version-history":[{"count":47,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/2577\/revisions"}],"predecessor-version":[{"id":40180,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/2577\/revisions\/40180"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/13844"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=2577"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=2577"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=2577"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}