Quotes by Daniel Kahneman (8)

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• Mutual funds are run by highly experienced and hard working professionals who buy and sell stocks to achieve the best possible results for their clients. Nevertheless, the evidence from more than fifty years of research is conclusive: for a large majority of fund managers, the selection of stocks is more like rolling dice than like playing poker.

  - Thinking, Fast and Slow by Daniel Kahneman, page 214Step 3

• There is general agreement among researchers that nearly all stock pickers, whether they know it or not-and few of them do-are playing a game of chance.

  - Thinking, Fast and Slow by Daniel Kahneman, page 214Step 3

• Unfortunately, skill in evaluating the business prospects of a firm is not sufficient for successful stock trading, where the key question is whether the information about the firm is already incorporated in the price of the stock.  Traders apparently lackthe skill to answer this crucial question, but they appear to be ignorant of their ignorance.

  - Thinking, Fast and Slow by Daniel Kahneman, page 216Step 3

• Finally, the illusions of validity and skill are supported by a powerful professional culture. We know that people can maintain an unshakeable faith in any proposition, however absurd, when they are sustained by a community of like-minded believers. Given the professional culture of the financial community, it is not surprising that large numbers of individuals in that world believe themselves to be among the chosen few who can do what they believe others cannot.

  - Thinking, Fast and Slow by Daniel Kahneman, page 217Step 3

• You should expect little or nothing from Wall Street stock pickers who hope to be more accurate than the market in predicting the future of prices. And you should not expect much from pundits making long-term forecasts.

  - Thinking, Fast and Slow by Daniel Kahneman, page 220Step 3

• Knowing the importance of luck, you should be particularly suspicious when highly consistent patterns emerge from the comparison of successful and less successful firms. In the presence of randomness, regular patterns can only be mirages.

  - Thinking, Fast and Slow by Daniel Kahneman, page 204Step 3

• The illusion of skill is not only an individual aberration: it is deeply ingrained in the culture of the industry. Facts that challenge such basic assumptions-and thereby threaten people’s livelihood and self-esteem-are simply not absorbed.

  - Thinking, Fast and Slow by Daniel Kahneman, page 216Step 3

• "I don't try to be clever at all. The idea that I could see what no one else can is an illusion."

  - Quotefancy.comStep 5