Here are some conclusions from the discussion:
- Predictions are difficult in culturally biased realms, including media and investment ideas.Through a novel experiment, researchers showed an average song can become a hit or a clunker based on the principle of cumulative advantage.
- Investors should think probabilistically. However, they must show considerable caution incounterfactual thinking, an exploration of what could have been. Further, counterfactual thinking can lead to some suboptimal behavior.
- We often make up causes for the effects we see. Management tomes are filled withadvice derived from reverse-engineering the success of leading companies without awareness of how specious the claims are. As theories become more robust, they often rely more on circumstances than attributes.
Knowledge grows through sharing! To be the best, learn from the best! May all your dreams come true! Collections of Value Investing articles, interviews and videos, especially on Warren Buffett and Charlie Munger and articles from various disciplines to build "Latticework of Mental Models"
Wednesday, September 12, 2007
Michael Mauboussin: Was Harry Potter Inevitable?
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