Money and Finance
- Links
Scott Adams: Words versus Reason (LINK) Berkshire Soars as Buffett Shifts Focus From Stocks to Takeovers (LINK) The Brooklyn Investor blog on the Shake Shack IPO (LINK) Canada’s Richest Grain Family Betting on Rebound in Oil [H/T Matt] (LINK) Oil:...
- The Relation Of Science And Religion: Some Fresh Observations On An Old Problem – By Richard P. Feynman
The 3 paragraphs in the second excerpt below relate a lot to investing, and many other things in life. In this age of specialization men who thoroughly know one field are often incompetent to discuss another. The great problems of the relations...
- Josh Waitzkin @ Google
I was a little slow getting around to watching this, but it was worth the wait. Josh Waitzkin also shared an interesting definition of wisdom from Robert Thurman: "Wisdom is the tolerance of cognitive dissonance." Related to that quote is some advice...
- At 71, Physics Professor Is A Web Star
Walter H. G. Lewin, 71, a physics professor, has long had a cult following at M.I.T. And he has now emerged as an international Internet guru, thanks to the global classroom the institute created to spread knowledge through cyberspace.-Professor Lewin’s...
- The Pleasure Of Finding Things Out
Link .................... For more on Richard Feynman, visit Feynman Online. ...
Money and Finance
BFBV Newsletter (No. 2) - Professor Sanjay Bakshi
Legendary Investor Richard Feynman
As far as I know, Richard Feynman never bought a stock in his life. If he did, he never talked about it or about his “investment acumen.” But he should have...
Feynman was not only a great physicist, he was also a great teacher.
…
Does it not bother you that one of the greatest men of science that the world has seen is quite happy to accept uncertainty (“I have approximate answers, and possible beliefs, and different degrees of certainty about different things, but I’m not absolutely sure of anything, and there are many things I don’t know anything about.”), while you are studying how to use the DCF model to value businesses? That’s a model which requires you to predict cash flows more than thirty years out requiring “degrees of certainty” that Feynman would have laughed at.
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Does it not bother you that a man of science can dare to say “I don’t know” while investment analysts almost never say that?
Feynman once said, “The first principle is that you must not fool yourself — and you are the easiest person to fool.”
How true! How we analysts fool ourselves so often! How often we just believe what we are told by companies and their self-interested agents and convert that nonsense into very nice-looking reports with plenty of pie charts and tables which make the whole thing look so believable!
In one of his famous lectures, Feynman was talking about the scientific method of inquiry. He said, “Looking back at the worst times, it always seems that they were times in which there were people who believed with absolute faith and absolute dogmatism in something. And they were so serious in this matter that they insisted that the rest of the world agree with them. And then they would do things that were directly inconsistent with their own beliefs in order to maintain that what they said was true.”
….......
The quote just above relates to cognitive dissonance. In the previous post, I listed Professor Bakshi’s advice from one of his lectures: "Learn to promptly resolve cognitive dissonance and you will acquire one of the greatest mental habits."
The Wikipedia definition:
“In psychology, cognitive dissonance is an uncomfortable feeling or stress caused by holding two contradictory ideas simultaneously. The theory of cognitive dissonance proposes that people have a fundamental cognitive drive to reduce this dissonance by modifying an existing belief, or rejecting one of the contradictory ideas.
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As far as I know, Richard Feynman never bought a stock in his life. If he did, he never talked about it or about his “investment acumen.” But he should have...
Feynman was not only a great physicist, he was also a great teacher.
…
Does it not bother you that one of the greatest men of science that the world has seen is quite happy to accept uncertainty (“I have approximate answers, and possible beliefs, and different degrees of certainty about different things, but I’m not absolutely sure of anything, and there are many things I don’t know anything about.”), while you are studying how to use the DCF model to value businesses? That’s a model which requires you to predict cash flows more than thirty years out requiring “degrees of certainty” that Feynman would have laughed at.
…
Does it not bother you that a man of science can dare to say “I don’t know” while investment analysts almost never say that?
Feynman once said, “The first principle is that you must not fool yourself — and you are the easiest person to fool.”
How true! How we analysts fool ourselves so often! How often we just believe what we are told by companies and their self-interested agents and convert that nonsense into very nice-looking reports with plenty of pie charts and tables which make the whole thing look so believable!
In one of his famous lectures, Feynman was talking about the scientific method of inquiry. He said, “Looking back at the worst times, it always seems that they were times in which there were people who believed with absolute faith and absolute dogmatism in something. And they were so serious in this matter that they insisted that the rest of the world agree with them. And then they would do things that were directly inconsistent with their own beliefs in order to maintain that what they said was true.”
….......
The quote just above relates to cognitive dissonance. In the previous post, I listed Professor Bakshi’s advice from one of his lectures: "Learn to promptly resolve cognitive dissonance and you will acquire one of the greatest mental habits."
The Wikipedia definition:
“In psychology, cognitive dissonance is an uncomfortable feeling or stress caused by holding two contradictory ideas simultaneously. The theory of cognitive dissonance proposes that people have a fundamental cognitive drive to reduce this dissonance by modifying an existing belief, or rejecting one of the contradictory ideas.
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Often one of the ideas is a fundamental element of ego, like "I am a good person" or "I made the right decision." This can result in rationalization when a person is presented with evidence of a bad choice, or in other cases. Prevention of cognitive dissonance may also contribute to confirmation bias or denial of discomforting evidence.”
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For a discussion on negotiating cognitive dissonance, see: Cognitive Dissonance
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Related previous post: The Pleasure of finding Things out
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"Cargo Cult Science"
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Feynman Online
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Books:
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Surely You're Joking, Mr. Feynman! (Adventures of a Curious Character)
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What Do You Care What Other People Think?: Further Adventures of a Curious Character
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Genius: The Life and Science of Richard Feynman
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The Meaning of It All: Thoughts of a Citizen-Scientist
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Perfectly Reasonable Deviations From The Beaten Track: The Letters Of Richard P. Feynman
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The Pleasure of Finding Things Out: The Best Short Works of Richard P. Feynman
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Six Easy Pieces: Essentials of Physics Explained by Its Most Brilliant Teacher
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Six Not-So-Easy Pieces: Einstein's Relativity, Symmetry, and Space-Time
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The Character of Physical Law
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- Links
Scott Adams: Words versus Reason (LINK) Berkshire Soars as Buffett Shifts Focus From Stocks to Takeovers (LINK) The Brooklyn Investor blog on the Shake Shack IPO (LINK) Canada’s Richest Grain Family Betting on Rebound in Oil [H/T Matt] (LINK) Oil:...
- The Relation Of Science And Religion: Some Fresh Observations On An Old Problem – By Richard P. Feynman
The 3 paragraphs in the second excerpt below relate a lot to investing, and many other things in life. In this age of specialization men who thoroughly know one field are often incompetent to discuss another. The great problems of the relations...
- Josh Waitzkin @ Google
I was a little slow getting around to watching this, but it was worth the wait. Josh Waitzkin also shared an interesting definition of wisdom from Robert Thurman: "Wisdom is the tolerance of cognitive dissonance." Related to that quote is some advice...
- At 71, Physics Professor Is A Web Star
Walter H. G. Lewin, 71, a physics professor, has long had a cult following at M.I.T. And he has now emerged as an international Internet guru, thanks to the global classroom the institute created to spread knowledge through cyberspace.-Professor Lewin’s...
- The Pleasure Of Finding Things Out
Link .................... For more on Richard Feynman, visit Feynman Online. ...