Monday, January 9, 2012

TEDx Talk - Tyler Cowen: Be suspicious of stories


Related quote:

"You need a story to displace a story. Metaphors and stories are far more potent (alas) than ideas; they are also easier to remember and more fun to read. If I have to go after what I call the narrative disciplines, my best tool is a narrative. Ideas come and go, stories stay." Nassim Taleb, The Black Swan


Relating this to investing, here are a couple of questions I have on my investing checklist about this topic:
  • Am I falling for a good story?
  • Are you sure you're not falling for the confirmation bias? (i.e. Have you approached the facts and data with a suspension of belief, rather than looking to confirm a theory or investment case/story?)