Page 13 - Morgan Housel - The Psychology of Money_ Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)

In the mid-2000s Fuscone borrowed heavily to expand an 18,000-square foot
home in Greenwich, Connecticut that had 11 bathrooms, two elevators, two
COBACOBA
pools, seven garages, and cost more than $90,000 a month to maintain.

Then the 2008 financial crisis hit.

The crisis hurt virtually everyone’s finances. It apparently turned Fuscone’s
into dust. High debt and illiquid assets left him bankrupt. “I currently have

no income,” he allegedly told a bankruptcy judge in 2008.

First his Palm Beach house was foreclosed.

In 2014 it was the Greenwich mansion’s turn.

Five months before Ronald Read left his fortune to charity, Richard
Fuscone’s home—where guests recalled the “thrill of dining and dancing
atop a see-through covering on the home’s indoor swimming pool”—was
sold in a foreclosure auction for 75% less than an insurance company figured
it was worth.³

Ronald Read was patient; Richard Fuscone was greedy. That’s all it took to
eclipse the massive education and experience gap between the two.

The lesson here is not to be more like Ronald and less like Richard—though
that’s not bad advice.

The fascinating thing about these stories is how unique they are to finance.

In what other industry does someone with no college degree, no training, no
background, no formal experience, and no connections massively
outperform someone with the best education, the best training, and the best

connections?

I struggle to think of any.

It is impossible to think of a story about Ronald Read performing a heart
transplant better than a Harvard-trained surgeon. Or designing a skyscraper
superior to the best-trained architects. There will never be a story of a janitor
outperforming the world’s top nuclear engineers.