Quote for the Week
Investing is about making decisions with your money. All of those decisions are probabilistic. As former Treasury Secretary (and maybe future Chairman of the Fed) Robert Rubin emphasizes in his new book, nothing is certain – except uncertainty – and decision procedures need to reflect that. In a recent speech, Fed Chairman Greenspan makes much the same point, and elaborates on the difference between the most likely outcome and low probability but high impact outcomes.
Decision procedures and outcomes also need to be clearly distinguished. A decision is not bad or wrong because the outcome turns out badly. And a good decision is not the same as one that turns out well. A decision is bad if the process that engendered it was bad, regardless of the outcome. Bad outcomes — losing a lot of money in an investment — can happen even if the process is sound; and good outcomes can occur even if the process is lousy. A market that is mostly efficient can distribute outcomes all over the place. — Bill Miller (source)
From the Archives
Last Call
- Beneath the Surface – T. Lamade
- Long-Term Money – M. Housel
- Family Wealth – Verdad
- Long Odds and Unseen Differences – S. Godin
- A Checklist for Making Better Decisions – Milkman Delivers
- How To Improve Your Information Diet – Range Widely
- We Haven’t Seen the Worst of What Gambling and Prediction Markets Will Do – D. Thompson
- Around the Moon and Back – Bloomberg
- How Apple Became Apple: The Definitive Oral History – Fast Company
- The Triumphs and Failures of Apple Without Steve Jobs – The Verge