In 1999, in the Journal of Personality and Social Psychology, my then graduate student Justin Kruger and I published a paper that documented how, in many areas of life, incompetent people do not recognize—scratch that, cannot recognize—just how incompetent they are, a phenomenon that has come to be known as the Dunning-Kruger effect. Logic itself almost demands…
One of the great failings of fundamental analysis is its reliance upon the narrative as its means of communication. Brokers will often ask analysts – whats the story? Meaning how can I sell this to the client. We are hardwired for narrative rather than data and this causes us enormnous problems in everything from dealing…
I have clearly been exercising incorrectly my entire life. Hang around till the one minute mark……
I have only seen the abstract of this article so far. However, the abstract as usual does give away the plot since it states – We provide direct evidence on the effect of financial expertise on investment outcomes by analyzing private portfolios of mutual fund managers. We find no evidence that financial experts make better investment decisions…
Exercise has been touted to be a cure for nearly everything in life, from depression, to memory loss, Alzheimer’s disease, Parkinson’s and more. At the same time, similar to the topic of sleep, I found myself having very little specific and scientific knowledge about what exercise really does to our bodies and our brains. “Yes, yes, I know all…
In 2008, Porsche was cruising. The luxury car manufacturer generated $13.5 BN in pre-tax profit, and sold a record 98,652 automobiles — a staggering $136K profit per car sold. Even for a luxury brand, the numbers seemed nearly impossible. Upon closer inspection, $11.5 billion dollars of that profit wasn’t from selling cars — it was from speculating on financial…
One day in the fall of 1981, eight men in their 70s stepped out of a van in front of a converted monastery in New Hampshire. They shuffled forward, a few of them arthritically stooped, a couple with canes. Then they passed through the door and entered a time warp. Perry Como crooned on a…
Nothing in life is to be feared, only understood – Marie Curie It is no secret the Marie Curie is one of my intellectual idols – the only person to win two Nobel Prizes in different disciplines. I don’t count the Peace prize won by the likes of Linus Pauling since it is a bullshit popularity…
Joel was wearing a black T-shirt tucked into black jeans, black Vans, and an Indian Motorcycle ball cap. The back of his head, where hair might be, was freshly shorn, and his features, which in dark or obscure moods can appear mottled and knotted, were at rest, projecting benevolent bemusement. To prepare for the flight,…
I regularly get emailed things from S&P Dow Jones Indices – most it relates to index structure, performance or changes. Some of it is data for data sakes with no real use, but some bits are interesting from a summary perspective. I have always had mixed views about volatility and have spoken about it a…
