You walk into a store to buy a baseball bat and a ball for your nephew and the pair together cost $1.10. The bat costs a buck more than the ball. How much does the ball cost? Ten cents - right?
In all the hoopla last week about books, no one mentioned Daniel Kahneman’s book “Thinking, Fast and Slow”.
Kahneman earned his noble prize in economics for his research that showed the lapses in human judgement when making economic decisions. Incidentally, in a recent talk, Kahneman said that portfolio managers should try to have fewer ideas, make fewer changes in their portfolios, and have less trust in their confidence.
The book is an easy read and lays out, in layperson’s terms, examples of errors in intuitive thinking that, at least in my case, seemed awful familiar. Those who have seen the movie “Moneyball” might recognize that the protagonist who reconfigured the concept of how baseball players were chosen was a student of Kahneman’s.
Along with “Factfulness” and “Sapiens”, this was one of the most important non-fiction books I can remember recently reading.
Kahneman said that portfolio managers should try to have fewer ideas, make fewer changes in their portfolios, and have less trust in their confidence.”
That is not off topic it is a core thesis of this board. Limit what is discussed here in scope so we stay disciplined and don’t hurt ourselves by too many ideas and too much desire to keep doing and perfecting things.
My investment style is the extreme of this. The only mistakes I made last year were precisely being tempted to do things. The mistakes hammered home why I do things the way I do. Same with Saul.
The problem is we get bored, we always need something new. We keep wanting to find that “cheap” undiscovered gem. I see it on this board every day. Nutanix, Pivotal, Talend, Zuo, Cloudera. I see people gleeful w these companies (until they yet again disappoint). They think the market just misunderstands.
The market misunderstands FUD, not fundamentals.
The Fool once focused on a few dozen shares, now hundreds. Why? Doing what is best for your returns does not sell newsletters.
Saul’s rules of the board to stay focused are proven time and time again. Kahneman or no Kahneman.
Why move AWS from quality to invest in hope that fundamentals will turn absent a real and true FUD event? But each to their own. I will stick w Saul and focus no matter how boring. The alternative is simply hazardous.
Why move AWS from quality to invest in hope that fundamentals will turn absent a real and true FUD event?
Well said Tinker.
By buying the ZUO’s ,CLDR’s, PVTL’s, etc…one is NOT diversifying…one is buying the worst of the SAME basket.
Stay with high revenue growth companies…the best of the basket…there aren’t many of them…and that does make for less frantic trading and less portfolio turnover.
You walk into a store to buy a baseball bat and a ball for your nephew and the pair together cost $1.10. The bat costs a buck more than the ball. How much does the ball cost? Ten cents - right?
If the ball is 10 cents and the bat a dollar more than the total expenditure is $1.20, not $1.10. To get $1.10 total the ball has to be 5 cents.
Stop this silliness. As RBG pointed out, this is clearly OFF-TOPIC! Threads on INVESTING BOOKS ARE OFF TOPIC, AND HAVE NOTHING TO DO WITH THE SUBJECT OF THIS BOARD, which is the discussion of individual growth stocks. And WHO CARES HOW MUCH THE BAT AND BALL COST?