Always good to read that someone you respect thinks that what you’re doing isn’t totally useless. Paradoxically Charlie is at the same time taking the moral high ground in most of his talks, while poker is a game that thrives on extracting as much money as possible from people that are not well equipped to gamble (to say it in a nice way).
One of the best antidotes to this folly is a good poker skill learned young. The teaching value of poker demonstrates that not all effective teaching occurs on a standard academic path.
That said, I think it’s a interesting book that absolutely worth reading. It’s not a book about investing, but more about the mental framework that’s needed to make good decisions and how psychological factors can affect countries, businesses and yourself. And that gets me to the following question: “how useful is it really to read a book where a priori you already know that you agree with the viewpoint of the author?”
On the, admittedly short, about me page of this blog I tell the world that the first book I read on investing is The Intelligent Investor and that I have been convinced that value investing is the right mindset to approach investing since, and secondly that being aware of behavioral biases is important. How convenient is it to read a book that confirms your believes: shouldn’t I be reading a book about technical analysis?
While I don’t think that’s a bad idea, I don’t think it’s especially useful either, and that results in my second consideration. It’s well known that people as a group are overly optimistic about their abilities. Eighty percent of drivers think they are above average, and even when people are aware of this bias it doesn’t change the results. Everybody still believes they are better than the rest.
So how can you truly objectively analyze your own decisions and abilities?