Tactics For Better Decision Making, And Skill Versus Luck
Audio Length: 00:57:47
Michael Mauboussin is a Managing Director and Head of Global Financial Strategies at Credit Suisse. He’s also a professor of finance at Columbia Business School, and the author of several books, such as; The Success Equation and More Than You Know.
Michael is widely recognized as a thought leader on the subject of decision-making, as well as thinking about things in the way of process over outcome, and skill vs luck.
And it’s these three things which are the over-arching theme of this episode. So hopefully, you’ll pick up a few good tips from Michael, that will help to improve your ability to make better decisions (and creating better processes) as a trader.
Topics of discussion:
- How one can judge the quality of their decisions, three examples of cognitive limitations and common biases, and where Bayes’ Theorem can be applicable.
- Is more information the key to better decisions—does it give a false sense of confidence or improve accuracy? And the concept of weighting information…
- One simple technique to deal with indecisiveness, general exercises you can do to improve your decision-making ability, and how the brain creates narratives.
- When it’s more important to focus on process over outcome, the important distinction between skill and luck, and three lessons from a legendary gambler.
Disclosure: None.