Money and Finance
From Thinking, Fast and Slow:
The above also reminded me of some Graham and Dodd comments, from Security Analysis:
- Links
Seth Godin had a short blog post on intuition that is worth thinking about. For a while I've been thinking about how to apply the 'Intuition = Pattern Recognition' equation to the process of continuing to develop one's skill in investing....
- Graham And Dodd On Business Quality And Price...
From Security Analysis (The abridged audiobook of what I believe is the 1934 edition is also on YouTube. It's a great narration by John Lescault, a great overview of 'how to think about investing', and something great to listen to before...
- The Temperament Needed To Be A Great Research Analyst...
From The Small-Cap Advantage: How Top Endowments and Foundations Turn Small Stocks into Big Returns: The temperament needed to be a great research analyst is similar to what is required for investigative journalism. A genuine curiosity and interest in...
- Daniel Kahneman's Long Now Talk
Link to video: Daniel Kahneman: Thinking Fast and SlowBefore a packed house, Kahneman began with the distinction between what he calls mental “System 1”---fast thinking, intuition---and “System 2”---slow thinking, careful consideration and calculation....
- Sam Harris Asks Daniel Kahneman A Few Questions
Much of your work focuses on the limitations of human intuition. Do you have any advice about when people should be especially hesitant to trust their intuitions? When the stakes are high. We have no reason to expect the quality of intuition to improve...
Money and Finance
A rule of intuition...
From Thinking, Fast and Slow:
It is wrong to blame anyone for failing to forecast accurately in an unpredictable world. However, it seems fair to blame professionals for believing they can succeed in an impossible task. Claims for correct intuitions in an unpredictable situation are self-delusional at best, sometimes worse. In the absence of valid cues, intuitive “hits” are due either to luck or to lies. If you find this conclusion surprising, you still have a lingering belief that intuition is magic. Remember this rule: intuition cannot be trusted in the absence of stable regularities in the environment.....................
The above also reminded me of some Graham and Dodd comments, from Security Analysis:
Intuition Not a Part of the Analyst’s Stock in Trade. In the absence of indications to the contrary we accept the past record as a basis for judging the future. But the analyst must be on the lookout for any such indications to the contrary. Here we must distinguish between vision or intuition on the one hand, and ordinary sound reasoning on the other. The ability to see what is coming is of inestimable value, but it cannot be expected to be part of the analyst’s stock in trade. (If he had it, he could dispense with analysis.) He can be asked to show only that moderate degree of foresight which springs from logic and from experience intelligently pondered. It was not to be demanded of the securities statistician, for example, that he foretell the enormous increase in cigarette consumption since 1915 or the decline in the cigar business or the astonishing stability of the snuff industry; nor could he have predicted—to use another example—that the two large can companies would be permitted to enjoy the full benefits from the increasing demand for their product, without the intrusion of that demoralizing competition which ruined the profits of even faster growing industries, e.g., radio.
- Links
Seth Godin had a short blog post on intuition that is worth thinking about. For a while I've been thinking about how to apply the 'Intuition = Pattern Recognition' equation to the process of continuing to develop one's skill in investing....
- Graham And Dodd On Business Quality And Price...
From Security Analysis (The abridged audiobook of what I believe is the 1934 edition is also on YouTube. It's a great narration by John Lescault, a great overview of 'how to think about investing', and something great to listen to before...
- The Temperament Needed To Be A Great Research Analyst...
From The Small-Cap Advantage: How Top Endowments and Foundations Turn Small Stocks into Big Returns: The temperament needed to be a great research analyst is similar to what is required for investigative journalism. A genuine curiosity and interest in...
- Daniel Kahneman's Long Now Talk
Link to video: Daniel Kahneman: Thinking Fast and SlowBefore a packed house, Kahneman began with the distinction between what he calls mental “System 1”---fast thinking, intuition---and “System 2”---slow thinking, careful consideration and calculation....
- Sam Harris Asks Daniel Kahneman A Few Questions
Much of your work focuses on the limitations of human intuition. Do you have any advice about when people should be especially hesitant to trust their intuitions? When the stakes are high. We have no reason to expect the quality of intuition to improve...