I strive to be smart, wise, analytical, creative, intuitive, and informative. I hope to help make you a better active investment management pro.
I recommend you start with the Best of the Blog.
The Intuitive Investor: Non-Attachment Is the Key Intuition Skill
In my last column I promised to share how to bring intuition more into your conscious awareness and how to translate it into something useful. Recall that in “The Intuitive Investor: A Simple Model of Intuition,” I said intuition is sensory stimulus followed by interpretation. I also said that if intuition fails an investor, it is usually because of poor awareness and poor interpretation, which are admittedly hard to overcome. It is my belief that awareness of intuition is made difficult by the many intellect- and emotion-based...
read moreHow Meditators Can Overcome Behavioral Finance Biases
While behavioral finance identifies and describes cognitive errors, it provides few remedies. In fact, when Daniel Kahneman was asked what could be done to overcome behavioral biases, he told delegates at CFA Institute’s 2012 Annual Conference: “Very little; I have 40 years of experience with this, and I still commit these errors. Knowing the errors is not the recipe to avoiding them.” The major behavioral biases stem from a lack of conscious awareness of how our minds function. The good news is that attaining consciousness is a hallmark of a...
read moreThe Scottish Secession Vote Is More Important Than You Think
Thursday, 18 September 2014, is the date of the Scottish secession vote. Most finance commentators are focused on the likely huge economic considerations. Yet, this vote is far more important than you may think. The secession vote, even if it fails, signals the beginning of the end of the preeminence of the nation-state. Here is why: The idea of the nation-state is a relatively recent phenomenon in human history; Increasingly, identity is coming from horizontal, not vertical, affiliations; and A state of quality of life parity is coming....
read moreSkills That Separate You as an Investment Manager: Forthrightness
Once you’ve finally landed that coveted position as a research analyst, how do you stand out from the crowd in this highly competitive field? Many of the skills needed for a successful investment management career are not taught in business schools, and so I’ve been enumerating the unconventional skills you will need to build a successful career in finance. Thus far I’ve covered: Introspection Creativity Intuition Decisiveness Absolute vs. relative decision making In this installment, we will discuss forthrightness....
read moreSkills That Separate You as an Investment Manager: Absolute vs. Relative Decision Making
Some of the skills you need to stand out from the crowd as research analyst are obvious: a love of economics, business, and finance; vast knowledge of the preceding; high drive; confidence; persistence; and so forth. But, many of the skills needed for a successful investment management career are not taught in business schools. My series on these unconventional skills has thus far covered introspection, creativity, intuition, and decisiveness. In this installment, we will discuss absolute vs. relative decision making. Absolute vs. Relative...
read moreThe Intuitive Investor: A Simple Model of Intuition
Last month, I started a regular column on the power of intuition in investing that inspired many of you to write to me directly to discuss your experiences. While most of you viewed intuition positively, your responses indicated you still weren’t sure how to define it (i.e., that it lacked a central idea). You also expressed some reservations about applying intuition to investing because it is perceived as unreliable. Both these observations stem from the fact that we lack a simple, broadly adopted model of intuition to aid our understanding....
read moreSkills That Separate You as an Investment Manager: Decisiveness
In a recent series of posts, I have sought to complement my advice on how to become a research analyst by dissecting the skills that can separate you from the crowd once you have landed a coveted research analyst position. Having hired research analyst interns, research analysts, a portfolio manager, and even my own successor when I retired from investment management in 2005, I have gained a fair amount of knowledge about the skills that can deliver a competitive advantage as you enter the investment management arena. My prior posts have...
read moreThe Intuitive Investor: Defining Intuition
In order to properly set the stage for additional discussion about the topic, it is important to first define intuition. Once we have a common understanding of what is meant by intuition, the benefits of cultivating intuition will become more obvious. I think Daniel Kahneman sets intuition up as a straw man for his behavioral economics theories. In his well-received book Thinking, Fast and Slow, of which I am a fan, he associates intuition with “System 1” thinking, which, he says, is “fast thinking,” characterized by snap assessments of...
read moreThe Intuitive Investor: Why Intuition Is Important
Over the course of my investment career, I used several unconventional tools to improve the results of the fund I co-managed, but none was more powerful than intuition. In fact, there is a growing regard for intuition as many successful investors, including George Soros, attribute their success to intuition. A recent Wall Street Journal article said of executive decision making, “The potential conclusion is that people who are good at strategy are better at sensing or feeling their way through strategies, rather than relying only on logic and...
read moreSkills That Separate You as an Investment Manager: Intuition
On the heels of the success of my blog post on how to become a research analyst, I have been writing a monthly series on the skills that truly separate you from the crowd once you have your coveted research analyst position. Thus far I’ve written about introspection and creativity. This month we’ll take a look at a skill I believe is highly undervalued: intuition. Intuition I think Daniel Kahneman sets intuition up as a straw man for his behavioral economics theories. In his well-received book Thinking, Fast and Slow, of which I...
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