Quote of the day by Fred Schwed Jr: “People would rather believe that they have been robbed than that they have been fools on the advice of fools”
The quote by American financial writer Fred Schwed Jr. captures a familiar weakness in human behaviour: when a decision goes wrong, people often find it easier to blame someone else than to acknowledge that they may have made a poor choice.
This tendency becomes particularly visible in the world of investing. When a stock falls sharply after an investor buys it, the immediate reaction can be to blame a broker, analyst, friend, social-media influencer or market commentator who recommended it.
But investing decisions ultimately remain the responsibility of the investor.
Schwed, best known for his witty observations about Wall Street, often highlighted the gap between how people perceive themselves and how they behave when money is at stake. His quote suggests that accepting a loss can be psychologically easier when it is framed as something done to us rather than something resulting from our own judgment.The danger of following advice blindly
Financial markets are full of opinions. Every day, investors encounter stock recommendations, market forecasts, trading calls and predictions about where an asset could move next.The problem arises when investors treat these views as certainty rather than information.
A recommendation may be based on reasonable assumptions and still turn out to be wrong. Markets are influenced by economic data, interest rates, corporate earnings, geopolitical developments and investor sentiment, many of which can change unexpectedly.
Blindly following advice can therefore create two risks. First, an investor may enter a position without understanding it. Second, when the investment performs poorly, the investor may be more inclined to blame the person who offered the advice rather than examine the decision-making process.
Understanding the decision matters more than finding someone to blame
Schwed’s observation also points to an important distinction between being wrong and being careless.
An investment can lose money even when it was made after careful research. Conversely, an investment can make money even when the original decision was poorly thought out.
That means the outcome alone does not necessarily tell the full story.
Investors can instead ask a few basic questions: Did I understand what I was buying? Was the investment consistent with my risk tolerance? Did I have a clear reason for entering the position? Was I relying on one person’s opinion? And did I have a plan for managing the risk?
These questions can turn a disappointing investment into a learning experience.
The bigger lesson
Fred Schwed Jr.’s quote is ultimately less about blaming investors and more about recognising human psychology.
People naturally want an explanation for financial losses. Blaming an external source can provide an easier explanation than admitting that emotions, incomplete information or poor judgment played a role.
For investors, however, accepting responsibility can be more useful than assigning blame. Markets will always produce winners and losers, and even experienced investors will make mistakes.
The key lesson is to treat financial advice as an input—not a substitute for independent judgment.
In investing, losing money can be painful. But failing to learn from why the loss happened can prove even more costly.
