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01-01-2016, 11:13 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Location: Denver
Posts: 3,499
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Biases
I am a big fan of scientists like Richard Thaler, Daniel Kahneman and the late Amos Tversky. Their research covers innate biases that we all have. This chart explains them in a concise way.
Enjoy.
20 cognitive biases that screw up your decisions | Business Insider
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01-01-2016, 04:24 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,806
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That's a good list.
The one that most concerns me is 'Blind Spot Bias". By definition, how can you know you are doing it if you are blind to it? And that bias can lead you down the wrong path.
It's why I try to be open to having my beliefs challenged - if I cant defend them, maybe they are a product of my own bias. I know some people don't like to be challenged in any way, but I don't think they are doing themselves any favors.
Have you read Kahneman's "Thinking, Fast and Slow"? Good book IMO, the examples went on and on, but I thought there were some excellent points made.
-ERD50
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01-01-2016, 04:35 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Feb 2013
Location: Toronto
Posts: 3,320
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Thanks. Yes very good list.
Was fun to see Richard Thaler along with Salena Gomez explaining derivatives in 'The Big Short'.
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01-01-2016, 06:28 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2012
Posts: 11,701
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I think one of the biggest biases around is that people are biased to think they don't have biases.
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01-01-2016, 06:35 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
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An episode of Through the Wormhole, about bigotry more so than bias, but they discover some interesting things...
http://www.sciencechannel.com/tv-sho...we-all-bigots/
__________________
Have Funds, Will Retire
...not doing anything of true substance...
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01-01-2016, 07:01 PM
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#6
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gone traveling
Join Date: Apr 2011
Posts: 3,375
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Collectively they sound very political to me.
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01-01-2016, 08:23 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Location: Denver
Posts: 3,499
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Quote:
Originally Posted by ERD50
Have you read Kahneman's "Thinking, Fast and Slow"? Good book IMO, the examples went on and on, but I thought there were some excellent points made.
-ERD50
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Yes, I have. And loved it.
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01-01-2016, 08:24 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Location: Denver
Posts: 3,499
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Quote:
Originally Posted by gerntz
Collectively they sound very political to me.
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Please elaborate.
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01-01-2016, 08:53 PM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2009
Posts: 9,343
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# 3 "Groupthink" was always a problem where I worked. My fellow administrators would get their panties in a wad when people didn't immediately agree with them... They couldn't understand that consensus and unified front comes after the "devils advocate" scenarios were thrown at them. Just maybe a great idea isn't so great if it can be picked apart.
Sent from my iPad using Tapatalk
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01-10-2016, 05:46 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,588
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Quote:
Originally Posted by ERD50
Have you read Kahneman's "Thinking, Fast and Slow"? Good book IMO, the examples went on and on, but I thought there were some excellent points made.
-ERD50
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A very brilliant Brit brought this to my/our attention but insisted that we are powerless to do otherwise.
I disagree. Training can change the automatic response. The Army is a prime example. Firefighters as well. We may be robots, but our programming can be changed.
I have changed the way I deal with money and investment (but that doesn't mean I've got it right yet). My British friend was a clueless investor--gambler, actually.
Managers and political leaders often think they know everything already but fall into these traps. They should read this book.
Sent from my SM-G900V using Early Retirement Forum mobile app
__________________
I have outlived most of the people I don't like and I am working on the rest.
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01-10-2016, 11:13 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 16,973
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Folks who have lived in 2 or more countries are able to compare different systems, which for the single country person is difficult to even understand.
Yet Nationalism means each country is the best !!
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01-11-2016, 10:10 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,797
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I'm impressed by the biaes investors display. It seems that even "experts" have this even though they are undoubtedly aware of investor bias. How else to explain some Boglehead arguments that can go on and on and become personal ... like debating holding commodities as a small part of the portfolio or high yield bonds as a small part of the portfolio. Not that I hold either of these but seeing people get abusive is somewhat disturbing.
Of course, we all have to eventually embrace some investment approach. But why hold it so closely that we feel threatened by discussions of other approaches? Thankfully this forum allows some latitude here. Maybe its the maturity showing through?
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01-12-2016, 09:32 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Jan 2008
Posts: 1,495
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Quote:
Originally Posted by JoeWras
I think one of the biggest biases around is that people are biased to think they don't have biases.
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+1
Quote:
Originally Posted by Lsbcal
I'm impressed by the biaes investors display. It seems that even "experts" have this even though they are undoubtedly aware of investor bias. How else to explain some Boglehead arguments that can go on and on and become personal ... like debating holding commodities as a small part of the portfolio or high yield bonds as a small part of the portfolio...)
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Exactly. Which is why I spend much less time on the BH forum than I ever used to.
Here's an example of what one can expect from "experts" (really?? a so-called expert had these "surprises" upon retirement??):
Retirement Surprises That Surprised Retirement Experts
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01-12-2016, 09:37 AM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2009
Posts: 9,343
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I have a bias and am totally aware of it. In fact it totally spearheads my investing decisions. It works for me, but not for others I am sure.
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01-12-2016, 09:40 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Quote:
Originally Posted by Lsbcal
I'm impressed by the biaes investors display. It seems that even "experts" have this even though they are undoubtedly aware of investor bias. How else to explain some Boglehead arguments that can go on and on and become personal ... like debating holding commodities as a small part of the portfolio or high yield bonds as a small part of the portfolio. Not that I hold either of these but seeing people get abusive is somewhat disturbing.
Of course, we all have to eventually embrace some investment approach. But why hold it so closely that we feel threatened by discussions of other approaches? Thankfully this forum allows some latitude here. Maybe its the maturity showing through?
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Even in a secular age, people need their religions very much. They just find them in non-traditional places.
Ha
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"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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01-12-2016, 10:01 AM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,797
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Quote:
Originally Posted by haha
Even in a secular age, people need their religions very much. They just find them in non-traditional places.
...
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Totally agree on this one.
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01-12-2016, 10:32 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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Quote:
Originally Posted by Mulligan
# 3 "Groupthink" was always a problem where I worked. My fellow administrators would get their panties in a wad when people didn't immediately agree with them... They couldn't understand that consensus and unified front comes after the "devils advocate" scenarios were thrown at them. Just maybe a great idea isn't so great if it can be picked apart.
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+1. The best leaders I worked for encouraged alternate views--at the appropriate time. The best staff members took full advantage to effectively sell alternatives and point out pitfalls. And, once the decision was made, they went back and worked hard to make whatever option was chosen succeed. If corrections are needed, they get made.
A guy/gal who goes along with the group and only brings good news to the boss isn't helping anyone--especially the boss.
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01-12-2016, 06:34 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Location: Denver
Posts: 3,499
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What is this "boss" that you guys go on about
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01-12-2016, 06:55 PM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Quote:
Originally Posted by haha
Even in a secular age, people need their religions very much. They just find them in non-traditional places.
Ha
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Very perceptive.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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