Posts filed under “Philosophy”

Morgan Housel Is A Permanent Optimist . . .

 

Hey, today we are having lunch with the astute Morgan Housel of MF. I have been enjoying his writing for years now — he is my favorite Motley Fool writer.

Here is his very simple explanation for why the end-of-worlders have been wrong, and will continue to be wrong, for most of the future millenia (see chart above).

Housel noted what has occurred over the past 150 year or so. If you allowed the headlines to drive your investments, how would you respond to these events:

• 1.3 million Americans died while fighting nine major wars.

• Four U.S. presidents were assassinated.

• 675,000 Americans died in a single year from a flu pandemic.

• 30 separate natural disasters killed at least 400 Americans each

• 33 recessions lasted a cumulative 48 years.

• The stock market fell more than 10% from a recent high at least 97 times.

• Stocks lost a third of their value at least 12 times.

• Annual inflation exceeded 7% in 20 separate years.

• The words “economic pessimism” appeared in newspapers at least 29,000 times, according to Google.

And despite these horrific headline events, our standard of living increased 20X.

Investing is about objectively playing the odds — not about giving into emotions. This is a perfect example of how short term events can hurt your long term returns — if you allow yourself emotional reactions to them.

 

Source:
Why I’m an Optimist
By Morgan Housel
Motley Fool, June 4, 2013
http://www.fool.com/investing/general/2013/06/04/why-im-an-optimist.aspx

Category: Cognitive Foibles, Investing, Philosophy

Does Math Exist or Is It a Human Creation?

Math is invisible. Unlike physics, chemistry, and biology we can’t see it, smell it, or even directly observe it in the universe. And so that has made a lot of really smart people ask, does it actually even EXIST?!?! Similar to the tree falling in the forest, there are people who believe that if no person existed to count, math wouldn’t be around . .at ALL!!!! But is this true? Do we live in a mathless universe? Or if math is a real entity that exists, are there formulas and mathematical concepts out there in the universe that are undiscovered? Or is it all fiction? Whew!! So many questions, so many theories… watch the episode and let us know what you think!

Is Math a Feature of the Universe or a Feature of Human Creation? | Idea Channel | PBS

Hat tip boingboing

Category: Mathematics, Philosophy, Video

QOTD: The World

Here is a quote to distract you from the Red on your screens this week: “The world is so big, so complicated, so replete with marvels and surprises that it takes years for most people to begin to notice that it is, also, irretrievably broken. We call this period of research ‘childhood.’ “There follows a…Read More

Category: Philosophy, Psychology

The Ex Post Facto Market Rationale

  Ex Post Facto: from or by subsequent action; subsequently; retrospectively; retroactively. From late Latin, literally, from a thing done afterward     I want to discuss a problem that exists in the narrative form of market commentary, one that I hinted at last night but did not have the time to fully explore in…Read More

Category: Cognitive Foibles, Markets, Philosophy

“What’s your outlook on the markets and the economy?”

I have a few conferences coming up later this summer, and as part of one event, I was asked a series of questions in advance. Its a pre- interview, and I figured I would work my way through the questions a little bit all week. But then I read the first question — the headline…Read More

Category: Economy, Financial Press, Markets, Philosophy

How You Can Change Your Decision Making

I like the thought process here: How You Can Change Your Decision Making Raise your awareness: Incomplete information and lots of uncertainty leads to poor outcomes Put yourself in the shoes of others: Consider the point of view or experience of other people Recognise the role of skill and luck: Sorting skill from luck is essential for evaluating…Read More

Category: Philosophy

Possible versus Probable

Its Friday, and has become my wont, this is the day of the week I like to kick back, wax philosophical about various thoughts kicking about me noggin. One of the things that I have been noticing of late is the way so many people seem to confuse facts with forecasts. Twitter is rife with…Read More

Category: Hedge Funds, Investing, Mathematics, Philosophy, Venture Capital

QOTD: The Market Giveth . . .

Here is my market quote for today, from MacroMan:   “The Market giveth and the Market inserts red hot pokers before dicing you into small chunks and spreading your remains to the four corners of the earth.”   That’s a bit more severe than “and the market taketh away,” but certainly makes a noteworthy point…Read More

Category: Philosophy, Psychology, Trading

Resigning from the Professional Undertaking of Coin Flipping

I love this quote that manages to combine elements of Uncertainty, Existentialism and Agnosticism:   “I have resigned from the professional undertaking of coin flipping. I am not here to tell you where golds gonna be. I have no idea. That’s my existentialism. I am a student of uncertainty. I have no idea where the…Read More

Category: Investing, Philosophy

Sales Training Versus Mentoring/Industry Knowledge

Its a steamy summer Friday, I got home very late last night, so this morning’s Friday philosophy will be brief: I keep reading about graduates trying to get into Wall Street training programs. I suspect most people do not understand what this means. A brief explanatory: For the new rank and file hires at the…Read More

Category: Apprenticed Investor, Philosophy