How the tendency to engage in twaddle or meaningless activities can affect you and others
24-Sep-2015 •Mohammed Ekramul Haque
What is it? The dictionary definition of 'twaddle' is silly idle talk, something that is insignificant or worthless. Humans have a tendency to engage in twaddle or meaningless activities that don't amount to much.
Often found in: Any activity that is not meaningfully significant or which doesn't make sense.
In Life: The twaddle tendency, if left unchecked, can result in a lot of lost time or resources. How to separate twaddle from meaningful work? Munger says, "A rightly famous Caltech engineering professor, exhibiting more insight than tact, once expressed his version of this idea as follows: 'The principal job of an academic administration is to keep the people who don't matter from interfering with the work of the people that do'."
In investing: Twaddle shows its head in investing too. Think of the hundreds of TV experts dishing out sermons on stocks and markets every day.
Another example is of fund managers. A favourite strategy of fund houses is to package funds into value or growth and then sell them separately to investors who are interested in either.
According to Munger, "The whole concept of dividing it up into 'value' and 'growth' strikes me as twaddle. It's convenient for a bunch of pension fund consultants to get fees prattling about and a way for one adviser to distinguish himself from another. But, to me, all intelligent investing is value investing - acquiring more than you are paying for. You must value the business in order to value the stock." This solves the problem for many of us who are concerned about value and growth.
You just read about one of the misjudgements people generally make while investing. Read 25 ways to (Not) make mistakes to get an account of Charlie Munger's twenty-five typical misjudgements, along with our commentary on how they fit into Indian businesses and Indian investments.