Let's Not Be Blind to our Blindness..!
Nassim Taleb's:
“My lesson from Soros is to start every meeting at my boutique by convincing everyone that we are a bunch of idiots who know nothing and are mistake-prone, but happen to be endowed with the rare privilege of knowing it.”
He also said:
"The only economic research that seems to replicate out-of-sample is the work of Daniel Kahneman on behavioral biases."
This phrasing reflects Taleb's critique of traditional economics and his acknowledgment of Kahneman's work on human decision-making, which can be tested and applied in real-world scenarios.
Taleb has discussed Daniel Kahneman's research on behavioral economics, particularly Prospect Theory, which studies how people make decisions under uncertainty.
A Wisdom from Daniel Kahneman:
Not only are we sometimes “blind to the obvious,” but also we are “blind to our blindness.”
We all have our own unique experiences and ways of thinking. This can make it hard to see things from a different viewpoint and recognize our own blind spots.
Here are some things you can do to overcome this blindness:
Be open to feedback: Ask trusted friends or colleagues for their honest opinions.
Seek out diverse viewpoints: Read books and articles from people with different backgrounds.
Challenge your assumptions: Actively question your own beliefs and biases.
By being aware of our limitations, we can start to see the world a little more clearly.
Prospect theory is a behavioral economics model developed by Daniel Kahneman and Amos Tversky in 1979. It challenges the idea that people make decisions based solely on logic and maximizing expected utility (total value of possible outcomes). Instead, Prospect Theory argues that:
Decisions are relative: We judge gains and losses relative to a reference point, often our current wealth or situation.
Loss aversion: People feel losses more intensely than equivalent gains. A $100 loss might feel worse than a $100 gain is satisfying.
Diminishing sensitivity: The impact of gains and losses diminishes as the amount increases. A $10 gain might feel more significant than a $100 gain.
Here's how these ideas influence decision-making:
Risk aversion for gains: When faced with choices involving gains, people tend to be risk-averse. They might prefer a guaranteed smaller gain over a risky chance of a larger gain.
Risk-seeking for losses: When faced with choices involving losses, people might become risk-seeking. They might choose a gamble with a chance to avoid a loss, even if the odds are not in their favor.
Prospect theory has numerous applications in understanding human behavior in various fields, including:
Investment decisions: Investors might be more likely to hold onto losing stocks to avoid the pain of realizing a loss.
Marketing and sales: Framing promotions around avoiding losses can be more effective than highlighting potential gains.
Public policy: Policymakers can use prospect theory to understand how people respond to incentives and risks.
Is it possible to be wrong and right at the same time???
My answer is Valid Yes..!
look at the following chart published 70 days ago
it moved in the opposite direction:
Now we can see why Claude Shannon said: “We know the past but cannot control it. We control the future but cannot know it.”
“My lesson from Soros is to start every meeting at my boutique by convincing everyone that we are a bunch of idiots who know nothing and are mistake-prone, but happen to be endowed with the rare privilege of knowing it.”
He also said:
"The only economic research that seems to replicate out-of-sample is the work of Daniel Kahneman on behavioral biases."
This phrasing reflects Taleb's critique of traditional economics and his acknowledgment of Kahneman's work on human decision-making, which can be tested and applied in real-world scenarios.
Taleb has discussed Daniel Kahneman's research on behavioral economics, particularly Prospect Theory, which studies how people make decisions under uncertainty.
A Wisdom from Daniel Kahneman:
Not only are we sometimes “blind to the obvious,” but also we are “blind to our blindness.”
We all have our own unique experiences and ways of thinking. This can make it hard to see things from a different viewpoint and recognize our own blind spots.
Here are some things you can do to overcome this blindness:
Be open to feedback: Ask trusted friends or colleagues for their honest opinions.
Seek out diverse viewpoints: Read books and articles from people with different backgrounds.
Challenge your assumptions: Actively question your own beliefs and biases.
By being aware of our limitations, we can start to see the world a little more clearly.
Prospect theory is a behavioral economics model developed by Daniel Kahneman and Amos Tversky in 1979. It challenges the idea that people make decisions based solely on logic and maximizing expected utility (total value of possible outcomes). Instead, Prospect Theory argues that:
Decisions are relative: We judge gains and losses relative to a reference point, often our current wealth or situation.
Loss aversion: People feel losses more intensely than equivalent gains. A $100 loss might feel worse than a $100 gain is satisfying.
Diminishing sensitivity: The impact of gains and losses diminishes as the amount increases. A $10 gain might feel more significant than a $100 gain.
Here's how these ideas influence decision-making:
Risk aversion for gains: When faced with choices involving gains, people tend to be risk-averse. They might prefer a guaranteed smaller gain over a risky chance of a larger gain.
Risk-seeking for losses: When faced with choices involving losses, people might become risk-seeking. They might choose a gamble with a chance to avoid a loss, even if the odds are not in their favor.
Prospect theory has numerous applications in understanding human behavior in various fields, including:
Investment decisions: Investors might be more likely to hold onto losing stocks to avoid the pain of realizing a loss.
Marketing and sales: Framing promotions around avoiding losses can be more effective than highlighting potential gains.
Public policy: Policymakers can use prospect theory to understand how people respond to incentives and risks.
Is it possible to be wrong and right at the same time???
My answer is Valid Yes..!
look at the following chart published 70 days ago
Comment:
you can close with 45-50% profit today!