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Warren Buffett: You've Been Learning Wrong All This Time... | Berkshire Hathaway 2009



[Transcript]

WARREN BUFFETT: I loved a fellow from the University of Chicago, one of the students. And the first question that was asked of me was, "What are we learning that's most wrong?" I wish they'd ask that sort of thing of the panel here.


CHARLIE MUNGER: How do you handle that in one session?


WARREN BUFFETT: Yeah. (Laughter) But it was holy writ 25 years ago, efficient market theory. You know, I never understood how you could even teach it. I mean, if you walked in in the first five minutes, you said to the students, "Everything is priced properly," I mean, how do you kill the rest of the hour? But — (Laughter) — they did it. And they got Ph.D.s for doing it well. You know, and the more Greek symbols they could work into their, you know, their writings, you know, the more they were revered. It's astounding to me and I — that may have even given me a jaundiced view of academia generally — is the degree to which ideas that are nutty take hold and get propagated. And then I read a quote the other day that may have partially explained it. Max Planck was talking, the famous physicist. Max Planck was talking about the resistance of the human mind, even the bright human mind, to new ideas. And particularly the ones that had been developed carefully over many years, and were blessed by others of stature, and so on. And he said, "Science advances one funeral at a time." And I think there's a lot of truth to that. Certainly been true in the world of finance.


~ Please visit the site above for full video of Berkshire Hathaway Annual Meeting.

 

[YAPSS Takeaway]

Even a bright human mind resist to new ideas.


"A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents die, and a new generation grows up that is familiar with it.”~Max Planck

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