Farnam Street
Mastering the best of what other people have already figured out
If you’re trying to gain a rapid understanding of a new area, one of the most important things you can do is to identify common mistakes people make, then avoid them. Here are some of the most predictable errors we tend to make when …
The best colloquial definition of risk may be the following: “Risk means more things can happen than will happen.” We found it through the inimitable Howard Marks, but it’s a quote from Elroy Dimson of the London Business …
Santa Fe Institute Board of Trustees Chair Michael Mauboussin interviewed Nobel Prize winner Daniel Kahneman. The wide-ranging conversation talks about disciplined intuition, causality, base rates, loss aversion and so much more. You …
An excerpt from The Aspirational Investor: Taming the Markets to Achieve Your Life’s Goals that I think you’d enjoy. Most of us have a healthy understanding of risk in the short term. When crossing the street, for example, you …
The Lucretius Problem is a mental defect where we assume the worst-case event that has happened is the worst-case event that can happen. In so doing, we fail to understand that the worst event that has happened in the past surpassed the …
I loved Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Taleb. This is the first popular book he wrote, the book that helped propel him into an intellectual celebrity. Interestingly, Fooled by Randomness …