The Dangers Of Comparing Yourself To Others In Pursuit Of Success

In the pursuit of success, it is common for people to compare themselves to others who are already successful. They look at their achievements and wealth and conclude that they should emulate their actions to achieve the same level of success. This kind of thinking is known as herd behavior, and it can be dangerous. In this essay, I will explain Howard Marks’ quote, “A mistake that people often make is they compare themselves with others who are making more money than they are and conclude that they should emulate the others’ actions…after they’ve worked.” I will provide examples and insights into how this behavior can get people into trouble.

At the heart of Marks’ quote is the idea that people tend to follow the herd, especially when it comes to money and success. They see others making money and assume that the same path will work for them. This behavior is driven by a fear of missing out (FOMO) and a desire for instant gratification. The problem with this thinking is that success is not a one-size-fits-all formula. What works for one person may not work for another.

For example, let’s say you want to start a business. You see someone in your industry who has become incredibly successful, and you decide to follow in their footsteps. You mimic their marketing strategies, pricing, and product offerings, hoping to achieve the same level of success. However, you soon discover that what worked for them doesn’t work for you. Your target market is different, your resources are limited, and your business model is not as profitable. Instead of achieving success, you end up losing money and wasting valuable time.

The danger of herd behavior is that it can lead to a lack of creativity and innovation. When everyone is doing the same thing, there is no room for originality. People become afraid to take risks and try something new, as they fear it won’t work. This can stifle progress and prevent individuals and businesses from reaching their full potential.

For instance, imagine a group of investors who are all following the same investment strategy. They invest in the same stocks, bonds, and commodities, and they all make similar returns. However, if one of those investors were to break away from the herd and invest in an emerging market or an innovative new technology, they may find greater success. They may also inspire others to take similar risks, leading to new opportunities and growth in the market.

Another problem with herd behavior is that it can lead to irrational decision-making. When people are driven by FOMO, they can make impulsive decisions without fully considering the risks and potential consequences. They may invest in a stock that is already overvalued, or they may buy a property in a market that is about to crash. These decisions can be costly and detrimental to their financial well-being.

For example, during the housing bubble of the mid-2000s, many people bought homes they couldn’t afford because they were afraid of missing out on the opportunity to own property. They assumed that the housing market would continue to rise, and they would make a fortune. However, when the market crashed, many of these people were left with mortgages they couldn’t afford and properties that were worth less than what they paid for them.

Howard Marks’ quote highlights the dangers of comparing yourself to others and following the herd in pursuit of success. Herd behavior can lead to a lack of creativity, irrational decision-making, and a failure to reach your full potential. Instead of blindly following others, it is important to think critically, be open to new ideas and take calculated risks. Success is not a one-size-fits-all formula, and the path to success may look different for each individual.

Background on Howard Marks;

Howard Marks is an American investor and writer who co-founded Oaktree Capital Management, a leading global investment firm that specializes in alternative investments, such as distressed debt and private equity. Marks is widely recognized as an expert in investment management, particularly in distressed debt investing, and has authored several books on investing and financial markets, including “The Most Important Thing: Uncommon Sense for the Thoughtful Investor” and “Mastering the Market Cycle: Getting the Odds on Your Side.” He is known for his contrarian investment approach and his emphasis on risk management. Marks has been a guest lecturer at several universities, including the Yale School of Management and the USC Marshall School of Business, and he is also a philanthropist, supporting various educational and cultural organizations.

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