
Don’t Blink: The Hazards of Confidence (2011) - tim_sw
http://www.nytimes.com/2011/10/23/magazine/dont-blink-the-hazards-of-confidence.html
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jimhefferon
He is always a thought-provoking and insightful author; thanks for the link.

I am often puzzled by an apparent (to me, anyway) contradiction: (1)
individual stock-traders are (mostly always) dice-throwers, versus (2) the
market figures out the correct price of the stock. Isn't the market made up of
individual traders? Doesn't (2) require that, across the entire market, the
year-to-year success rate not be zero?

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plonh
There is no correct price. There is just consensus. The notion of price
discovery is just about getting investors to share their beliefs by making
offers, getting to an inherently real answer.

On average, the market grows in value because companies eventually pay
dividends from profitable endeavors.

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jimhefferon
> There is no correct price. There is just consensus.

And yet Warren Buffet is fantastically wealthy. The average investment
advisor, this article states, is not.

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draw_down
The problem with this topic is that you start to see it everywhere, in
everyone's behavior and thinking. It will drive you batty, and you can't do
anything about it.

I spent a lot of time learning about all the different ways we humans fool
ourselves. I'm not sure it was time well spent.

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fauigerzigerk
I think the idea that two people taking the opposite sides of a stock trade
are directly contradicting each other is incorrect because it ignores risk,
volatility and time horizon.

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klunger
This topic is covered in significantly more depth in his book Thinking Fast
and Slow. I highly recommend taking the time to read it, if this article
piqued your interest.

