Corner of Berkshire & Fairfax Message Board

General Category => Books => Topic started by: Liberty on October 21, 2011, 12:53:09 PM

Title: Thinking, Fast and Slow - Daniel Kahneman
Post by: Liberty on October 21, 2011, 12:53:09 PM
Thinking, Fast and Slow

http://www.nytimes.com/2011/10/21/opinion/brooks-who-you-are.html?_r=1

Coming out soon. His research into cognitive biases and heuristics is very helpful to any value investor who tries to have an edge by being more rational than the market. I also recommend:

Judgment Under Uncertainty:  Heuristics and Biases

Heuristics Biases:  The Psychology of Intuitive Judgment
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: eclecticvalue on October 21, 2011, 03:09:48 PM
I read the article in the NYT. My takeaway from the article is he thinks any of the great investors that have done very well. All of their success is attributed to luck. The few paragraphs that talks about overconfidence was great.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Liberty on October 21, 2011, 10:39:14 PM
I read the article in the NYT. My takeaway from the article is he thinks any of the great investors that have done very well. All of their success is attributed to luck. The few paragraphs that talks about overconfidence was great.

I'm not sure I understand. Where does the NYT article talks about investing and luck?

In any case, the NYT piece is pretty superficial and that writer isn't known for his accuracy about scientific matters. I recommend reading the source material.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: eclecticvalue on October 22, 2011, 12:03:04 AM
This is the link I was talking about. http://www.nytimes.com/2011/10/23/magazine/dont-blink-the-hazards-of-confidence.html?pagewanted=all (http://www.nytimes.com/2011/10/23/magazine/dont-blink-the-hazards-of-confidence.html?pagewanted=all)
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Liberty on October 22, 2011, 11:18:02 AM
Thanks for the link. He seems to basically agree with Buffett and Munger that most of the finance industry adds very little value.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: eclecticvalue on October 22, 2011, 11:49:02 AM
I agree the financial services industry doesn't provide much value. I gleaned from the article that most stock pickers don't do well and the very successful ones performance is all luck.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Liberty on October 22, 2011, 12:10:45 PM
I agree the financial services industry doesn't provide much value. I gleaned from the article that most stock pickers don't do well and the very successful ones performance is all luck.

He seems to have studied random wall street traders, so I'm not surprised that he came up with that conclusion. I don't think it's meant to applied to all investors, including value ones.

But in any case, what's most interesting about the work of Daniel K. and Amos T. is not their work that is directly about investing. It's more about this kind of stuff:

http://en.wikipedia.org/wiki/List_of_cognitive_biases
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: twacowfca on October 22, 2011, 01:32:54 PM
Kahneman and Tversky, may he rest in peace, tell it like is for the 99 % of investment advisors and fund managers that don't live in Graham and Doddsville or are just visiting.  :)
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: eclecticvalue on October 22, 2011, 03:25:02 PM
I wasn't sure if he meant value investors also. Thank you for your thoughts Liberty. I wonder what were his thoughts on value investors. Also the list of cognitive bias is very long I wonder if I could master all of them. I have made mistakes from those bias'
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Hester on October 23, 2011, 10:06:30 AM
Sam Hrris is doing an interview with Kahneman and will be asking some questions submited by readers.

For anyone interested:

http://www.samharris.org/site/contact_author/
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: gaf63 on October 27, 2011, 12:40:36 PM
Bloomberg has 3 excerpts from their book with a 4th to follow, here is the link to the 3 rd part(with links to 1 & 2)
http://www.bloomberg.com/news/2011-10-26/bias-blindness-and-how-we-truly-think-part-3-daniel-kahneman.html
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: dcollon on October 27, 2011, 12:45:28 PM
I'm enjoying the book so far, but have a long ways to go.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: biaggio on October 28, 2011, 05:49:20 PM
http://myinvestingnotebook.blogspot.com/2011/10/video-kahneman-market-cancels-random.html


interview with author from Farnham's website/blog
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: netnet on November 10, 2011, 08:56:31 PM
Thinking Fast and Slow

I'm am halfway through Daniel Kahneman's new book Thinking Fast and Slow.

It is nothing short of brilliant.  You must read this book!

(Kahneman, a psychologist, won a Nobel in Economics.  Partially an intellectual memoir, it is brilliant, illuminating (and also has some nice elegiac passages about his late collaborator, Amos Tversky.)  It reads like a conversation with your favorite uncle who happens to be brilliant and who won a Nobel prize by inventing an entirely new field.

Here is Michael Lewis's Vanity Fair article on the book:
http://www.vanityfair.com/business/features/2011/12/michael-lewis-201112
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Liberty on November 11, 2011, 08:14:36 AM
There's already a thread about this book:

http://www.cornerofberkshireandfairfax.ca/forum/index.php?topic=5488.0
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: alpha23 on November 11, 2011, 08:56:52 AM
This is the link I was talking about. http://www.nytimes.com/2011/10/23/magazine/dont-blink-the-hazards-of-confidence.html?pagewanted=all (http://www.nytimes.com/2011/10/23/magazine/dont-blink-the-hazards-of-confidence.html?pagewanted=all)

Fascinating article. I have often observed that my favorite people after which to model my own behavior are those with loads of humility coupled with above average results. People with the sense to be humble are often the ones who learn / adapt most readily even when they are highly accomplished.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: netnet on November 11, 2011, 10:54:02 AM
I know. After i wrote it, I tried to kill the message, but the system would not let me.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: DCG on November 11, 2011, 11:36:53 AM
This book looks interesting. I have too many damn books on my reading list and not enough time, but I'll add this one to the list.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: biaggio on November 11, 2011, 12:26:46 PM
This book looks interesting. I have too many damn books on my reading list and not enough time, but I'll add this one to the list.

I know what u mean
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: AZ_Value on November 11, 2011, 12:33:53 PM
This book looks interesting. I have too many damn books on my reading list and not enough time, but I'll add this one to the list.

I've had to learn to live with this problem for a while now.
Someone needs to disable my Amazon account until I work my way through my current reading list. It's starting to get ridiculous. But I somehow always get excited and order a new one.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: oddballstocks on November 11, 2011, 12:47:50 PM
This is the link I was talking about. http://www.nytimes.com/2011/10/23/magazine/dont-blink-the-hazards-of-confidence.html?pagewanted=all (http://www.nytimes.com/2011/10/23/magazine/dont-blink-the-hazards-of-confidence.html?pagewanted=all)

Fascinating article. I have often observed that my favorite people after which to model my own behavior are those with loads of humility coupled with above average results. People with the sense to be humble are often the ones who learn / adapt most readily even when they are highly accomplished.

Humility is huge, probably the most underrated quality but one that plays the biggest factor in outcomes.  Often ego or pride will blind people to data or outcomes.

I wish humility would get more airtime, of course not many people actually strive for humility...
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: ubuy2wron on April 26, 2012, 04:12:27 PM
I am about half way through this gem of a book by Daniel Kahneman a Nobel Prize winner for economics. I rate it a must read for anyone who wants to understand why most individuals find the discipline of investing so gosh darn frustrating. We are mostly hard wired to make poor choices.
http://www.theglobeandmail.com/news/arts/books/thinking-fast-and-slow-by-daniel-kahneman/article2249529/
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: rogermunibond on April 26, 2012, 06:30:22 PM
My take from his book is that we were mostly wired to make fast choices in an environment and complexity level that changed dramatically from our evolutionary past to now.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: ubuy2wron on April 27, 2012, 07:32:07 AM
Roger As I said I am only half way through, but the fact that individuals let their type one thinking make so many decisions even the important ones explains , at least partially, why the value discipline can produce superior returns.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Liberty on April 27, 2012, 07:51:08 AM
If you liked this you can go straight to the source:

http://www.amazon.com/Judgment-under-Uncertainty-Heuristics-Biases/dp/0521284147/

http://www.amazon.com/Heuristics-Biases-Psychology-Intuitive-Judgment/dp/0521796792/

http://www.amazon.com/Choices-Values-Frames-Daniel-Kahneman/dp/0521627494/
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: rogermunibond on April 27, 2012, 03:47:31 PM
Ubuy - yes very much agree with you. My one caveat is that many of the simpler decisions we make in day to day life are the system I kind.   And by and large fast thinking serves us well there. But with our modern complex and more numerate world, system I fails us.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Spekulatius on April 25, 2018, 08:19:52 PM
I listened to this book as an audiobook during my long weekend commutes. I think it is a fantastic read (or listen) abdndurectoy applicable to investing as well, even though it is mostly about how the human mind works. I highly recommend this book!
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: boilermaker75 on April 26, 2018, 04:47:25 AM
I listened to this book as an audiobook during my long weekend commutes. I think it is a fantastic read (or listen) abdndurectoy applicable to investing as well, even though it is mostly about how the human mind works. I highly recommend this book!

It has been a while since I read it. It was great; I need to read it again. Maybe I will get the Kindle version this time so it is easy to generate notes.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Liberty on June 28, 2018, 10:47:22 AM
https://www.standard.co.uk/lifestyle/london-life/the-thought-father-nobel-prize-winning-psychologist-daniel-kahneman-on-luck-9199162.html

Quote
As for Kahneman’s million-selling 2011 book, Thinking, Fast and Slow — the distillation of his life’s work, dedicated to Tversky, who died in 1996 — well, we count ourselves lucky that he wrote it at all. “I hated every minute of writing it and I didn’t like it when it was finished,” he complains. “So its success has been a great surprise to me.”
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Liberty on July 01, 2018, 04:31:29 AM
Looks like there's a new book on the works:

https://www.thebookseller.com/news/william-collins-scoops-kahnemans-book-7-figure-pre-empt-752276
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: DooDiligence on July 01, 2018, 06:40:35 AM
"A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth."

This statement couldn't be more relevant in todays political environment.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Spekulatius on July 01, 2018, 07:41:19 PM
"A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth."

This statement couldn't be more relevant in todays political environment.

This tool is very commonly used in dictatorships. Just read Orwell. Those who grew up behind the Iron curtain know this very well.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Liberty on July 02, 2018, 04:07:55 AM
"A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth."

This statement couldn't be more relevant in todays political environment.

This tool is very commonly used in dictatorships. Just read Orwell. Those who grew up behind the Iron curtain know this very well.

Or read Trump's Twitter.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Jurgis on July 02, 2018, 08:30:20 AM
"A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth."

This statement couldn't be more relevant in todays political environment.

This tool is very commonly used in dictatorships. Just read Orwell. Those who grew up behind the Iron curtain know this very well.

Happens in investment discussions too... Not always consciously ... 
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: DooDiligence on July 04, 2018, 04:08:38 PM
"A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth."

This statement couldn't be more relevant in todays political environment.

This tool is very commonly used in dictatorships. Just read Orwell. Those who grew up behind the Iron curtain know this very well.

Happens in investment discussions too... Not always consciously ...

I say Berkshire entirely too often.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Jurgis on August 07, 2018, 01:46:39 PM
Another article about biases and de-biasing: https://www.theatlantic.com/magazine/archive/2018/09/cognitive-bias/565775/

Kahneman again. Tetlock again. But also Nisbett (who I haven't seen mentioned before) and some good links and pointers.
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Cigarbutt on August 07, 2018, 02:32:30 PM
Another article about biases and de-biasing: https://www.theatlantic.com/magazine/archive/2018/09/cognitive-bias/565775/

Kahneman again. Tetlock again. But also Nisbett (who I haven't seen mentioned before) and some good links and pointers.

Since you seem to have a significant attachment to the halo effect, you may be interested in:
https://deepblue.lib.umich.edu/bitstream/handle/2027.42/92158/TheHaloEffect.pdf?sequence=1&isAllowed=y
"When considering the establishment of rules concerning blind review, conflict of interest, nepotism, and the like, it would therefore seem advisable to consider more than the possibility that some individuals in the system may be venal and corrupt. The protestations of even the most virtuous and disinterested participants that they are capable of independent judgments should be considered suspect."

Beware of the venal and the virtuous?
Title: Re: Thinking, Fast and Slow - Daniel Kahneman
Post by: Jurgis on August 07, 2018, 03:37:28 PM
Since you seem to have a significant attachment to the halo effect, you may be interested in:
https://deepblue.lib.umich.edu/bitstream/handle/2027.42/92158/TheHaloEffect.pdf?sequence=1&isAllowed=y

Quote
Two different videotaped interviews were staged with the same individual—a
college instructor who spoke English with a European accent. In one of the
interviews the instructor was warm and friendly, in the other, cold and distant.
The subjects who saw the warm instructor rated his appearance, mannerisms,
and accent as appealing, whereas those who saw the cold instructor rated these
attributes as irritating These results indicate that global evaluations of a person
can induce altered evaluations of the person's attributes, even when there is
sufficient information to allow for independent assessments of them.

Now I know why people don't like my couture.  8)