Taking my title assertion one step further, in many cases Opinion About News due to our beliefs can become our reality, whether factual or not. Yes, we are all entitled to our own opinions and beliefs. It is a free country. However, in investing, relying on strongly-held beliefs and opinions about the news can be quite risky.
First of all let me give credit to money manager and fellow blogger Jeff Miller as the inspiration for this post. I highly recommend his work to you as a regular read. Jeff has been around the market for many years and has developed many excellent sources for his own investment practice. Each week he combines the output of these sources with his own proprietary input to publish “Weighing The Week Ahead.” In one of his recent posts … ” Will earnings confirm economic strength?”, he cited an observation about education and belief by Morgan Housel (one of his trusted sources), as a Best of the week.
Miller’s Best of the Week
If I had to pick a single most important source for investors to read this week it would be Morgan Housel’s account of his dinner with Daniel Kahneman. It is a nice summary of Kahneman’s basic ideas – all worth reading. Morgan has a great sense for what is important and what you need to know about it. Here is my favorite quote:
On education changing thinking: “There are studies showing that when you present evidence to people they get very polarized even if they are highly educated. They find ways to interpret the evidence in conflicting ways. Our mind is constructed so that in many situations where we have beliefs and we have facts, the beliefs come first. That’s what makes people incapable of being convinced by evidence. So education by itself is not going to change the culture. Changing critical thinking through education is very slow and I’m not very optimistic about it.”
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