"The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt."

— Bertrand Russell

• I once met a man in his 60's, a mechanic by trade, who netted $3 million on the sale of his Harley dealership.  He dismissed any investment discussion with, "I have an account at Fidelity."  I have no idea what he thinks he meant.
• A friend recently invested several million dollars in long-term bonds on the advice of a Schwab advisor (which is akin to asking the girl at the Dairy Queen take-out window).  He had no idea that bond prices fluctuate like stock prices, and that long-term bonds are among the worst investments in an inflationary environment.
• A couple asked for a meeting to discuss tax strategies.  The wife had just received an inheritance, and the couple was taking a course on currency futures.  They wanted to discuss the tax problem they were about to have on all their profits.  It's impossible to know what to say after such a statement.

There are interesting tendencies when someone comes into a little bit (not a lot) of money:

1) The master becomes the servant. There is enough to self-indulge, but not quite enough to quell the fear that it's not quite enough.  A fascinating conflict develops between the desire to become lord of the manor, and an obsession to watch every penny.

2) New money will engage an accountant, a lawyer, a landscaper, a tennis pro, and every other kind of assistance, but by god, nobody touches the money (actually, a tennis pro once lectured me about real estate.  If I, in turn, lectured him about tennis, he would have thought me mad). Professional, educated men are the worst. The need to be clever with money is invariably a hard-wired guy thing, regardless of background, aptitude or education.

3)  George Soros talks about the profound influence of the philosopher Karl Popper, which can be described as the chronic habit of asking oneself  "what did I miss?  Why am I wrong?"  Professional money asks questions. It listens. It examines ideas under objective scrutiny.

New money proclaims.  It argues.  It never listens, never asks – not really.  The question is merely a pretense to give lecture.  Or a solicitation to repeatedly hear the answer they want to hear.  New money makes profound investment decisions with insufficient scrutiny.  And it is not wrong, even when it is dead wrong.

4) Managing money is hard.  It is a blood sport.  A good hedge fund manager is worth every penny.  But an essential skill is to assuage the vanity of the well-read, jargon-dropping client who nonetheless has no idea what they are doing.  Everyone was a dot.com expert before they became a real estate expert.  Everyone has a diversified, rebalanced portfolio until the damn asset classes all fall in unison.  Everyone knows to invest in index funds, but still lose their fingers diving for the falling knife.

I once had an investment banking client in the late 1980's who was among the richest real estate developers in the Bay area.  He was unburdened by reflection, compounded by an acute listening problem.  By 1995, he was renting a two-bedroom apartment.  That leaves an impression.

Perhaps Gordon Gecko said it best:  a fool and his money are lucky to get together in the first place.