There is good ego and bad ego. The good ego is what tells the kid that the body is different from the table. It tells you where your body starts and where it ends. If you see a 2-year old kid going under a table or a chair – he is checking out his ‘ego’. However when ego starts interfering with your wealth creation, you have a major problem.
I have seen many investors (recently upgraded from chronic traders) who suddenly believe that they can handle their own portfolios. If you have done well in the recent past – say from 2002 there is a great chance that you believe you have the essential portfolio management skills needed to handle your portfolio. The lessons of 2009 have been wrongly ‘learnt’!
Even people whose portfolio is completely run in an outsourced manner believe that they are adding value to the portfolio. Alcoholism is easy to spot – egotism is not. Of course people have a right to ruining their portfolios…you can only see from the sides and feel bad and sigh!
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