Carlo Cipolla

That we should not deal with stupid people at all is well implied in Warren Buffett and Charlie Munger’s emphasis on avoiding lousy people at all cost. Deal with companies like you deal with people (companies are managed by people after all)—just leave them alone instead of shorting them, engaging with them, trying to profit from such engagements. Their focus on the fundamental is also implied because people’s expectation can be stupid, and you don’t want to deal with that, either.revisit

The Basic Laws of Human Stupidity

• The First Basic Law
  • Always and inevitably everyone underestimates the number of stupid individuals in circulation
• The Second Basic Law
  • The probability that a certain person be stupid is independent of any other characteristic of that person
    • One finds the same percentage of stupid people whether one is considering very large groups or one is dealing with very small ones
    • At the Northern Pole or at the Equator, whether in developed or underdeveloped countries, whether they are black, red, white or yellow, female or male—that proportion is constant
• The Third Basic Law
  • A stupid person is a person who causes losses to another person or to a group of persons while himself deriving no gain and even possibly incurring losses
    • “Nobody knows, understands or can possibly explain why that preposterous creature does what he does. In fact there is no explanation — or better, there is only one explanation: the person in question is stupid.”
• The Fourth Basic Law
  • Non-stupid people always underestimate the damaging power of stupid individuals. In particular non-stupid people constantly forget that at all times and places and under any circumstances to deal and/or associate with stupid people infallibly turns out to be a costly mistake.
    • “When confronted with stupid individuals often intelligent men make the mistake of indulging in feelings of self-complacency and contemptuousness instead of immediately secreting adequate quantities of adrenalin and building up defenses.”
• The Fifth Basic Law
  • A stupid person is the most dangerous type of person
  • A stupid person is more dangerous than a bandit
• The power of stupidity
  • Because the stupid person’s actions do not conform to the rules of rationality, it follows that:
    • One is generally caught by surprise by the attack;
    • Even when one becomes aware of the attack, one cannot recognize a rational defense, because the attack itself lacks any rational structure.