3 Burst results for "Philip Tat"
Fisher Vs. Keynes: Investing Tragedy And Triumph
"Irving fisher was born in eighteen sixty seven in the town of saugerties. New york got his phd economics from yale in eighteen ninety one and for most of his adult life he enjoyed this almost unparalleled streak of success. Yeah not just as a great economist but also as an entrepreneur and investor. Tim harford is the author of the data detective. A new book that includes a chapter about irving fisher. He was the basically the inventor of what we now call the rolodex card filing system. That made him a multimillionaire. He was a diet and fitness expert. He published a book called how to live which was the freakonomics of its day. Only sold five hundred thousand copies. He set up the life extension institute. He was a campaigner on prohibition. He was a vegetarian. Assist an astonishing a prolific campaigner and thinker and he made a lot of money in the markets for a while as the stock market in the nineteen twenties was going up and up fisher was investing more and more money into it in fact even though he was already investing a ton of his own money he was also borrowing even more money to invest in stocks so that he could boost his returns fisher was just supremely confident about his forecast that the market would keep going up confident both in his own intelligence and also in the possibility of using data and statistics to predict the future. So that's where irving fisher was right before the crash of nineteen twenty. Nine john maynard. Keynes the other. Great economists of the era got there a little differently. Canes was definitely already considered one of the great economic minds of the time and just like irving fischer canes knew. He was the smartest guy in every room. He walked into same. Yeah me too something. We all share with gains right. But unlike irving fisher john maynard. Keynes had gotten some things wrong. By that point he had been humbled by the market before he had an early investment fund immediately after the first world war that just went went bankrupt and it was fine canes raise more money went back into the market. Got everyone's cashback. Everyone lived happily ever after but he had that experience going. Oh yeah. I thought i was smart on the market. Maybe i'm not smart on the market when the crash of one thousand nine hundred nine arrive. The stock market collapsed more than twenty percent in two days and within three years it had fallen more than eighty nine percent from where it was before the crash. Both and john maynard. Keynes lost a lot of money on their investments in the crash but there is a huge difference in how they responded so after the crash fisher kept doubling down on the same investments. He even kept borrowing money to invest in the same. Losing stocks for example fisher owned stock in a company called remington rand and right before the crash remington rand stock was at fifty eight dollars share but after the crash of two three months it was twenty eight dollars. A share and fisher was borrowing money and buying more shares at twenty eight dollars for years into the crash. It was one dollars a share. That is how to be a millionaire. Lose everything maybe fisher believed that his precious data just could not be wrong or that he could not be wrong or that. His self worth was tied up in this idea that he was right. Whatever the case he couldn't change his mind and he lost everything. Canes was different kane street at his failures as a chance to learn a chance to improve his process up to the crash he'd been investing based on his ability to predict the ups and downs of the whole economy. But after the crash he decided that that was just too hard to unknowable so he changed his strategy to investing in companies that he believed had good management and he thought would go up over time no matter what the overall economy was doing. Canes made a fortune for himself and for the endowment of king's college us money he was managing one of the things he said when he was trying to raise money from his own father was win or lose. This high stakes gaming amuses me. That's that's just an amazing linked to say when you're trying to persuade someone to give you money and yet in the end it helps because he just didn't take it so personally for the past few decades. A psychologist named philip tat. Lock has studied the behaviors that lead to better forecasting being very precise predictions constantly. Checking to see if your forecasts or proving true and updating your forecast if they are not true all of these make you a better forecaster. But tim says if he had to summarize. All of this research on a bumper sticker. Full cost is better when they recognized. They might be wrong and they are asking themselves. What am i missing. What perspective having tie considered. Who haven't i talked to that sort of almost paranoid suspicion that you might have messed up. And the willingness to change your mind that leads to much better forecasting you know it sounds so obvious. Just be able to change your mind and yet in practice. People really struggle to change their minds especially about their deeply held beliefs. That irving fisher could not change his mind and john maynard. Keynes could ended up making all the difference in how they lived the rest of their lives a few months after the second world war at fissuring canes both died fisher was alone and nearly bankrupt hitting bailed out by his millionaire sister-in-law and he'd completely lost his reputation as a result of his failed forecast. It's such a tragic end to a great career. Canes died a millionaire the most famous and celebrated economists on the planet and there is a quote that sometimes gets attributed to canes that. Tim also likes to remember him by. He probably never said it but he lifted which is when the facts change. I change my
"philip tat" Discussed on The Blog of Author Tim Ferriss
"They're the people you should envy to ask you about. One of your many books class Now like my my read into. Please correct me if I'm wrong. Is That A. You've you've argued that we've in some respects become a stagnant and cautious society. What does that? What does that mean? If I'm actually sort of interpreting things correctly and feel free to correct me we innovate less especially outside of the tech sector. Our incomes grow more slowly we move around the United States at roughly half the rates we used to. We are now unable to pull off grant projects such as putting a man on the moon. Almost all of the spending of our federal government is now locked in much of that most of that going to the elderly. We're just a less dynamic society. People are crazy how they bring up their kids no risk is to be allowed people obsess over. What kindergarten will my kid get into if they don't get into that kindergarten? My goodness lost. We are far more a society of credentials which I regard as a huge negative All of that and more what. What can one do is is? Are there any personal actions that you would suggest to counteract or counterbalance in some fashion? Those societal trends I mean of course. It's more than just societal trend. There are actual government policies and so on. But what can the individual do if they listen to you? Say This and they agree with you. Are there any particular practices are steps or recommendations that you absolutely? Sa- Steve Levitt the freakonomics Guy. He wrote a great paper where he took some people and he looked at their major decisions and for some of the people aucoin with flipped and if the coin said they had to make a big change they made the big change. An ex post. The people who made the big changes were happier than those who did not so of course it depends on the person and on the context but in general. Read that Steve. Levitt paper think about the coin flipping and more time. Make the big change. Of course it's a right But it seems on average it pays off question for you is the those were big changes determined by the flip of a coin. Is that right right right okay? How much of the happiness with the big change do you think was from making the big change or being absolved of the the buyer slash sellers? Regret equivalent second guessing in other words. Decision that you had to make on your own. I don't know if it's only the being absolved that matters. Well treat me is the villain and you are hereby absolved from responsibility. Just say tyler made me do it. And they'll often be happier in the rest of society will do do better as well. What are some of the major decisions that you've made? That have been extremely impactful in your life. I decided that I would really focus on the Internet and giving away my output for free and mostly stopping doing peer reviewed scholarly research and devoting all my time to blogging and online essays and online education in my podcast. And that has gone phenomenally. Well for me. When did you make it doesn't sound that scary I started blogging. I think seventeen years ago in the notion that I would do this every day for what is now. Almost seventeen years at the time was extremely weird and I was doing well in my other endeavors. It wasn't there was some kind of failure that needs to be patched up but I just thought I mean do this. I'm not going to look back I like no one paid any attention for years. I just kept on doubling down happily oblivious fog and it worked out great so so I'm going to push back a little bit on the oblivious fog. You're smart guy. You're you're you're you're able to say I was a med irrational. You settled smart guy. Maybe I was going to med irrational next. That was my second compliment. How what was your decision making framework for for doing that seventeen years ago so that places. Us around two thousand three. Roughly how did how did you make that decision? Which at the time too many very smart. I will use the word. Smart here colleagues probably appeared absurd. How did you? What was your decision making framework or? How did you think about making that decision? I'm not even sure I had decision making framework I think in a way. I'm dysfunctional as a decision maker at that level. I like did it for a day. I enjoyed it and I just didn't stop doing it in a very selfish curious. Greedy with information way and it was just became quickly impossible to turn that ship around so I thought wow I've got to do more of this and I mean I would hesitate to recommend my so-called decision making process to anyone. What was the the positive feedback loop on the daily experience that kept you going for years before it seemingly game gain traction? What was it that appealed so much to you for three or four years? We had a few thousand readers but it wasn't a thing and it hadn't taken off. It was fine and when I started I thought oh it would be awesome to have only five thousand readers like some kind of Utopian Dream But I lost track of that and I just found. I was learning things having to write all these posts like. Oh I need to learn this. I need to learn that and then when I would write on it I would change my mind so I thought well. This is some form of progress and again just stuck at it and then later like blogs became thing and even though blogging is mostly disappeared. It's gone very well for us. We've played a kind of last man standing strategy and we haven't seen that kind of cutback in readership. I think it's it's it's lost some of its newness sex appeal but I would be astonished if long form or even not so long form writing as long as it is of high quality for considered of high quality for at least a few thousand people or even less. I don't see that going away anytime soon. And I know that there are other media any other forms of Media. That are more fashionable. Perhaps but I'm certainly not concerned for the longevity of your readership. I think you'll be fine. How have you thought about branching out from the written word and making decisions about that? Well I do now a podcast. Every two weeks that's called conversations with Tyler and that keeps me very busy dominates a lot of my reading time. you know that's for free? It's not a business for me. It probably costs me some money but I find. I read much better when I'm reading their work to go and interview them so next. I'll be doing Philip Tat. Lock the Guy who writes on prediction and super forecasters that will force me to get my thoughts in order on those topics after that. I think it's emily St. John Mandel. Who wrote station eleven? Which coincidentally is a book about pandemics and she has a new book out. I read fiction much better when I know I'm talking to the author himself or herself When I interviewed Martina Navratilova to learn a lot about the history of tennis. I read fifty books on the history of women's and also men's tennis. That was fantastic. I wouldn't have absorbed them in the same way if I wasn't going to be speaking to her so I'm just keep on doing these podcasts again. Totally dysfunctional decision. Making on my.
"philip tat" Discussed on Fareed Zakaria GPS
"Of the process. And that's the kind of thing that I think we can apply in our own lives. Right. We tend to go with our gut. We tend to go with our first impression of the situation. And we actually need to take time. Imagine alternate scenarios challenge. Our assumptions that's the kind of exercise that that I read about in the book, and you talk about how it's important to imagine. What things will go will look like. Two years three as foyers out not just tomorrow. So in in some sense, a big life decision or a big corporate decision is on some level prediction about the future. Right. And so one of the things that I did in the book is I went back and looked at people in our in the science of prediction like how where have we gotten better at making predictions, right? Where wh- what can we learn from the studies of a people who are good forecasters, and one of the things we've learned this from famous that of studied from a guy named Philip tat lock is that people who are good predictors of the future have a diverse set of interest. Right. They they don't just have a single unified theory of the world, right? They're interested in lots of different things. And those are the people when they're trying to forecast events in a complex system. Those are the people end up being smarter and more far-sighted basically in the judgments, they make there are some people who do approach their decision making in exactly the kind of analytic way. You you want them to? Charles Darwin when he was deciding how to get married what did he do? So this is actually the the seat of this book for me years ago. It was writing about Darwin's notebooks during the eighteen thirties when he's coming up the theory of evolution. And there's a very funny in the middle of all of his scientific jottings to himself all of his fascinating, kind of intellectual expirations of of evolution. He takes over two pages in the notebooks. And he creates a pros and cons list for getting married, and it's a list is kind of dated a little bit. I mean reproduced it in the book one of his things he's concerned about if he gets married at city will give up the clever conversation of men in clubs like that's what concerned, but what struck me about. It is the pros and cons list is the one technique that, you know, most of us learn for making complex decisions. And so here.