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A psychologist explains why we’re probably all delusional and how to fix it

Every once in a while, a friend attends therapy for the first time and starts breathlessly reporting all the revelations she’s learned. In many of these circumstances, it’s all I can do to stop myself from yelling that I, or any of her other friends, could just as easily have told her these same “discoveries.”

But I shouldn’t throw stones. When I announced that I finally realized I wanted to report on science, my best friend rolled her eyes at this obvious (to her) fact.

Almost nobody is self-aware, says psychologist Tasha Eurich in her new book Insight. So many of us are obsessed with “knowing ourselves” and spend hours contemplating who we are and how we appear to others. But few truly know either our own desires and goals (what she calls “internal self-awareness”) or how others see us (or “external self-awareness.”) The Verge spoke to Eurich about myths about self-awareness, how we can fix our delusion, and whether we even want to know the truth.

More here – The Verge

Why some billionaires are bad for growth, and others aren’t

 

A piece in the Fairfax press today referenced a book by economist Professor Paul Frijters called Game of Mates. In essence the books looks at both the political connnectness of billionaires, how this affects their wealth, the wealth of a country and their contribution to innovation. In short it found that billionaires in Australia are highly politically connected with Australia ranking only behind the likes of Colombia and India in the degree to which influence guides wealth. It also shows that locally billionaires are a drain on the economy because of their stifling of innovation and the rent seeking nature of their wealth. True risk taking is not in their nature, guiding and influencing our third rate politicians is.

The piece in the Fairfax press referenced an earlier examination of this work done by the Washington Post which to my eye is a more complete analysis which offers this very salient point –

Looking at all the data, the researchers found that Russia, Argentina, Colombia, Malaysia, India, Australia, Indonesia, Thailand, South Korea and Italy had relatively more politically connected wealth. Hong Kong, the Netherlands, Singapore, Sweden, Switzerland and the U.K. all had zero politically connected billionaires. The U.S. also had very low levels of politically connected wealth inequality, falling just outside the top 10 at number 11.

When the researchers compared these figures to economic growth, the findings were clear: These politically connected billionaires weighed on economic growth. In fact, wealth inequality that came from political connections was responsible for nearly all the negative effect on economic growth that the researchers had observed from wealth inequality overall. Wealth inequality that wasn’t due to political connections, income inequality and poverty all had little effect on growth.

“The negative effects of wealth inequality are largely being driven by politically connected wealth inequality. That seems to be the primary channel that drives this relationship,” Bagchi said in an interview.

The researchers estimate that a 3.72 percent increase in the level of wealth inequality would cost a country about half a percent of real GDP per capita growth. That’s a big impact, given that average GDP growth is in the neighborhood of two percent per year, Bagchi said.

Why is politically connected wealth inequality so bad for a country? The researchers suggest that when wealth and power becomes concentrated in the hands of a few, those business and political elites often influence government policy in a way that hurts the broader interest.

None of this does anything to change my opinion that the hyper wealthy in Australia are simply a bunch of whingers who seek favour from politicians as opposed to doing anything that has a long term inter generational impact.

A Roger Moore Story To Make Us Feel Better

As an seven year old in about 1983, in the days before First Class Lounges at airports, I was with my grandad in Nice Airport and saw Roger Moore sitting at the departure gate, reading a paper. I told my granddad I’d just seen James Bond and asked if we could go over so I could get his autograph. My grandad had no idea who James Bond or Roger Moore were, so we walked over and he popped me in front of Roger Moore, with the words “my grandson says you’re famous. Can you sign this?”As charming as you’d expect, Roger asks my name and duly signs the back of my plane ticket, a fulsome note full of best wishes. I’m ecstatic, but as we head back to our seats, I glance down at the signature. It’s hard to decipher it but it definitely doesn’t say ‘James Bond’. My grandad looks at it, half figures out it says ‘Roger Moore’ – I have absolutely no idea who that is, and my hearts sinks. I tell my grandad he’s signed it wrong, that he’s put someone else’s name – so my grandad heads back to Roger Moore, holding the ticket which he’s only just signed.

I remember staying by our seats and my grandad saying “he says you’ve signed the wrong name. He says your name is James Bond.” Roger Moore’s face crinkled up with realisation and he beckoned me over. When I was by his knee, he leant over, looked from side to side, raised an eyebrow and in a hushed voice said to me, “I have to sign my name as ‘Roger Moore’ because otherwise…Blofeld might find out I was here.” He asked me not to tell anyone that I’d just seen James Bond, and he thanked me for keeping his secret. I went back to our seats, my nerves absolutely jangling with delight. My grandad asked me if he’d signed ‘James Bond.’ No, I said. I’d got it wrong. I was working with James Bond now.

Many, many years later, I was working as a scriptwriter on a recording that involved UNICEF, and Roger Moore was doing a piece to camera as an ambassador. He was completely lovely and while the cameramen were setting up, I told him in passing the story of when I met him in Nice Airport. He was happy to hear it, and he had a chuckle and said “Well, I don’t remember but I’m glad you got to meet James Bond.” So that was lovely.

And then he did something so brilliant. After the filming, he walked past me in the corridor, heading out to his car – but as he got level, he paused, looked both ways, raised an eyebrow and in a hushed voice said, “Of course I remember our meeting in Nice. But I didn’t say anything in there, because those cameramen – any one of them could be working for Blofeld.”

I was as delighted at 30 as I had been at 7. What a man. What a tremendous man.

More here – B3ta

When Enough Is Not Enough…


 

Its Not My Fault…But Then Its Never My Fault

Whilst sitting at my local this afternoon enjoy a cuppa and a Kit Kat I spied someone reading a piece about a company called SurfStich which to be honest I had never head of as it doesn’t sit within my universe of tradeable stocks. To save you the trouble of reading the article I can summarise it quick quickly. SurfStich lists in 2014, the listing is a bit lacklustre but price recovers from the $1 listing price to hit a high of $2.13. Stock then dies in the arse and shareholders crack the sad’s and want to sue the company. I have dropped a chart of the price action  below.

Capture

On the chart I have plotted the listing price of $1.00 and as you can see the stock spent a good year above the listing price before beginning its precipitous fall from grace. I can guarantee you that when the stock price passed through $2.00 the investors who are now suing the company considered themselves to be absolute geniuses and when the stock began to fall those who ran the company were apparently complete dickheads for letting it happen. Here is a news flash for investors who operate on this sort of deflection of personal responsibility – you are responsible for your own actions and all the consequences that flow from them. You had ample time to exit the stock with a substantial profit but you didn’t – the decision not to was your fault – no one else is to blame.

I understand the notion of personal responsibility is an anathema to a lot of people but if ever there was a cornerstone principle for being successful at anything it is being able to accept your role in the events as they unfold. You cannot consider yourself to be the best investor in the world when price is running your way but then somehow seek to blame the company for your failure to take any form of defensive action when things do not go your way. This just paints you as a childish amateur.

This Really Shits Me

This little rant has nothing to do with trading so if you are not interested tune out now. I came across the article below whilst looking for something else and I thought it would be a good primer piece for people who wanted to know a little bit more about statistics since it uses neither mathematical notation nor formula and then I saw that I had to fork out EUR41.94 (about $AUD63.00) for the privilege of simply downloading.

research

This sort of thing along with the rise of bullshit journals, pay to publish, citation mining and the general drop in quality of cornerstone publications such as Science and Nature are some of the reasons why I am glad I left this life behind.

Quote of the Day

On Sunday we had the middle meeting of our Mentor Program and one of the topics that always creeps up is the desire for complexity within trading. There is a belief that the more complex your system the better it will be In part this is due to the illusion of control that such approaches engender. We feel that if we have much greater input into the system then the system somehow will exert a degree of control or rationality over the market. This is analogous to why people pick their lottery numbers rather than letting them be generated randomly. The odds of winning do not change with either method but the first creates the illusion of control.

As chance would have it I came across the following quote which touches on the notion of simplicity.

“Simplicity is the last step in art and the beginning of nature.”

– Bruce Lee.

 

 

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