Comments
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TTThis could be the most thoroughly rational piece I've seen yet on RV. Well done. I've lived in the PE world since 2007 and the process is absolutely applicable.
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ACThat "blow out your headphones" music is back.... Thanks, RVTV. The people in the coffee shop missed me screaming and throwing down my iPad and ripping out my EarPods in a painful outburst - arrgghhh!
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CSI'd say if you take most people, their real issue is being too risk averse than being too gung ho and risk taking. I recently went round asking just about everyone I know: "If I offer you a 10/1 payout on a coin flip, how much over your net worth would you bet?" And very few people replied any kind of acceptable amount, many people even said "Nothing, I don't gamble." I found the whole thing rather depressing, evidence that I need to surround myself with better people. Over the course of a life, a career, you need to actually play a hand. Just make sure you're still standing to play the next one too.
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DSWhen you combine the MACHINE LEARNING REVOLUTION interview and the FIVE BEHAVIORAL MISTAKES INVESTORS MAKE interview, you see how powerful Dr. Villani’s machines are. I believe it is the combination of machine learning with market acumen that will provide the edge. Just like having a pilot in the plane when it is on autopilot, it is the combination that will work. Very few people will have both of those skill sets. DLS
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CJThis guy gets an A for pedagogy. A most useful piece. Thank you.
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SBExcellent. A really clear and well structured presentation on behavioural finance.
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CHit might be an idea to put a share button on here somewhere so you can post an excerpt to twitter
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CHClever shit
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MSPhenomenal. Concise, well articulated, insightful.
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RMIt's sobering (being a macro gadfly myself) to hear another investing legend in addition to Buffett say macro is generally beyond their abilities. One of the points made in Superforecasting by Tetlock which expands on many of Michael's points is the primary importance of choosing the most predictable problems on which to focus your forecasting energies. Obviously Michael and Warren have decided that starting point should be narrowed down to bets on companies with a 10yr track record of stable and high ROE, entered with a margin of safety, without leverage, as part of a portfolio, held through drawdowns as long as the thesis is intact, and perhaps reweighted when over valued.
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rrSuper critical content really well delivered. Kudos Michael & RV.
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TEDecision don
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SWThis was great! Thank you Michael and RV!
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ALThis is gold. We all need a concrete process to help us mitigate these problems. Journaling is a great start.
Chapters
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Why do Behavioral Mistakes Matter?
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What's the First Mistake Investors Make?
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What's the Third Mistake Investors Make?
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What's the Second Mistake Investors Make?
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What's the Fourth Mistake Investors Make?
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What's the Fifth Mistake Investors Make?
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Which Mistake is Most Important to Overcome?
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Techniques for Overcoming Behavioral Mistakes
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Exploitable Mistakes
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Mistakes Shifting with Economic Cycles
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How Has Your Thinking Changed?
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Personal Behavioral Behavioral Biases