A Good Book for These Final Summer Doldrum Days
We're entering those two weeks before Labor Day that mark the high point of the August summer doldrums. While there will always be exceptions to the rule, expect a quieting of news stories. In financial markets, we could get a calmness or stillness. People either take vacation or tend to be in distracted mode. So rather than drive yourself crazy trying to engage with a disinterested world, it's a good time to ease up on your usual work load.
For the readers out there, a good book can happily take the place of commercial exchange. It's a good time to tackle that big book you've wanted to devour. One that I'm working on: Thinking Fast and Slow by Daniel Kahneman. Kahneman's a winner of the Nobel Prize in Economics. He unselfishly credits his work with now deceased academic partner Amos Tversky for his being awarded the prize. The two published seminal studies "that challenged the rational model of judgment and decision making" according to the dust cover of the book. In the investment arena, their work, and now Kahneman's, has played an important role in helping us understand how we make decisions to buy, sell, allocate our assets, etc. Such understanding applied to your investment process in a disciplined manner, can help you, among other things, avoid the sort of emotional decisions that the average investor makes to his or her great disadvantage.
This book distinguishes between two "kinds" of thinking: fast and slow. Fast is something we all do. Slow is something fewer of us do. Fast comes "naturally" and relatively easily. Relying on what we call "intuition," it's helpful for making certain kinds of decisions. Slow thinking, a longer, more arduous process, doesn't come as easily to most of us. But it's well worth the effort. "Kahneman reveals where we can and cannot trust our intuitions and how we can tap into the benefits of slow thinking."
I've found the book a bit tedious at times. While his writing is lucid, Kahneman, being an academic, does drag us through details that obviously suit his desire to be thorough. As a result, being somewhat familiar with the subject matter, I find myself skimming certain sections of the book. So I'm not really criticizing the author here. He's making a case, and he does it well. So you may, on the other hand, find the specifics of this or that study conducted by various academic psychologists interesting.
Either way, if you get the main points about fast and slow thinking, and why both are important, you'll benefit from reading this book. A better understanding of how we make decisions, and why we make them will help us avoid bad decisions and make better ones. For example, if you tend to rely too much on your intuition (fast thinking), you'll tend to jump to conclusions when a more rational, even-handed consideration of the facts would be in order. Or you might be more easily manipulated by those who know how to plant certain words, phrases or ideas to steer you into making a decision that benefits them, without consideration of whether it benefits you.
For me, filling some of my summer doldrums time up reading this book has been worthwhile.
For the readers out there, a good book can happily take the place of commercial exchange. It's a good time to tackle that big book you've wanted to devour. One that I'm working on: Thinking Fast and Slow by Daniel Kahneman. Kahneman's a winner of the Nobel Prize in Economics. He unselfishly credits his work with now deceased academic partner Amos Tversky for his being awarded the prize. The two published seminal studies "that challenged the rational model of judgment and decision making" according to the dust cover of the book. In the investment arena, their work, and now Kahneman's, has played an important role in helping us understand how we make decisions to buy, sell, allocate our assets, etc. Such understanding applied to your investment process in a disciplined manner, can help you, among other things, avoid the sort of emotional decisions that the average investor makes to his or her great disadvantage.
This book distinguishes between two "kinds" of thinking: fast and slow. Fast is something we all do. Slow is something fewer of us do. Fast comes "naturally" and relatively easily. Relying on what we call "intuition," it's helpful for making certain kinds of decisions. Slow thinking, a longer, more arduous process, doesn't come as easily to most of us. But it's well worth the effort. "Kahneman reveals where we can and cannot trust our intuitions and how we can tap into the benefits of slow thinking."
I've found the book a bit tedious at times. While his writing is lucid, Kahneman, being an academic, does drag us through details that obviously suit his desire to be thorough. As a result, being somewhat familiar with the subject matter, I find myself skimming certain sections of the book. So I'm not really criticizing the author here. He's making a case, and he does it well. So you may, on the other hand, find the specifics of this or that study conducted by various academic psychologists interesting.
Either way, if you get the main points about fast and slow thinking, and why both are important, you'll benefit from reading this book. A better understanding of how we make decisions, and why we make them will help us avoid bad decisions and make better ones. For example, if you tend to rely too much on your intuition (fast thinking), you'll tend to jump to conclusions when a more rational, even-handed consideration of the facts would be in order. Or you might be more easily manipulated by those who know how to plant certain words, phrases or ideas to steer you into making a decision that benefits them, without consideration of whether it benefits you.
For me, filling some of my summer doldrums time up reading this book has been worthwhile.
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