Models.Behaving.Badly.: Why Confusing Illusion with Reality Can Lead to Disaster, on Wall Street and in Life
Emanuel Dermanamazon.com
Models.Behaving.Badly.: Why Confusing Illusion with Reality Can Lead to Disaster, on Wall Street and in Life
The End of Theory: Financial Crises, the Failure of Economics, and the Sweep of Human Interaction
amazon.com
All models are wrong, but some are useful. George Box, statistician
Gregory Zuckerman • The Man Who Solved the Market
Most of the reason why, I believe, is that we think about and are taught about money in ways that are too much like physics (with rules and laws) and not enough like psychology (with emotions and nuance).
Morgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
A rational person will invest a large sum in an enterprise that is most likely to fail if the rewards of success are large enough, without deluding herself about the chances of success. However, we are not all rational, and some of us may need the security of distorted estimates to avoid paralysis. If you choose to delude yourself by accepting extr
... See moreDaniel Kahneman • Thinking, Fast and Slow
Engineers can determine the cause of a bridge collapse because there’s agreement that if a certain amount of force is applied to a certain area, that area will break. Physics isn’t controversial. It’s guided by laws. Finance is different. It’s guided by people’s behaviors. And how I behave might make sense to me but look crazy to you.
Morgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
