Funny that I never knew or wondered about your profession. You write with the freedom of a retired person, not a high-stress trader. James Bailey wrote a similar piece about the value of emotion in relationships vs investing that you might enjoy on the subject. https://onmoneyandmeaning.substack.com/p/the-invisible-authors-the-visible
Not yet retired! Not even sure I will ever be, I guess. What I can say is that I've learned to cope with stress pretty effectively, although you can't really eliminate it. And I also learned to act freely on the job, with the right detachment. But investing in the stock market is a little different. :) Thank you for pointing me to James' piece, I will sure read it!
I've always found the research on behavioral biases somewhat difficult. Not that I don't agree they exist, but knowing about them doesn't really seem to make it any easier to avoid them. As far as I can tell, even in the limited field of investing (curious what kind of investments you make, maybe we should talk about that), making money doesn't seem to be about simply removing emotion from trades. There's still value in "gut instincts" that are largely products of emotion. Then again, I've only worked in Private Equity for a short time, so my own experience is quite limited.
I also have issues with the framing Kahneman and Tversky used for biases as always things to eliminate for optimal performance. Not sure if you've looked at much 4E cognitive science, but I prefer their framing. The biases (and Systems 1 thinking) are bad for rational based endeavors (investing, academic activities, etc.) but are the basis for experiences like wonder, awe, and personal growth. Ironically, these biases seem to be the basis by which we can change our relationship as agents with our arena, and it's this transcended relationship which seems to allow new insights that often lead to better outcomes in rational pursuits. At least that's how I've read it.
I’m with you 100% on this, Latham. Biases are there, have always been, and knowing they are doesn’t really add anything to our mental sanity. The fact that they cannot be eliminated maybe makes us even more insane at times, or prone to insanity, if anything. But it’s good, to me, to know some of these things. They’re so natural they make you go like “of course” every time you hear of one of them. Unconscious twists of our behaviors that might make us even more self-conscious, if possible. I’ve done almost 20 years of private equity investing and I know what you’re talking about when you mention gut instincts. Public markets investing, though, is different: you have a price that moves every second and you constantly question whether you’re right or the market’s right, before making a decision. This is an additional layer that a private investment doesn’t have, and can absorb your emotional energy pretty fast. In my case, emotions show up upon price swings largely because I worry about what my investors’ reaction may be. Going back to biases, I’m not really familiar with 4E cognitive science, but in general I’m pro-emotions. It couldn’t be otherwise: if we’re human, we can’t get rid of them (and I don’t want to), so we should try to put them to work for us, somehow.
What an interesting topic Silvio. More and more I think about extremes and how it's not a matter of taking sides, but of embracing each side when it makes sense, and that navigating and balancing sides is where life is happening. And you're spot-on on where emotions are valuable, and when they might not be, but that in the end, they're necessary.
You're also an example in being able to balance these two seemingly opposing sides (work-investing/play, culture and all the rest).
Having the topic fresh through our conversations, reading this also made me think of koans, and that the main reason I like them is because they surpass that logic, certain layer that we tend to rely too much into.
Thank you so much, Oscar! I think, as you say, life is a matter of embracing extremes when they're needed, without necessarily taking a side and doing wars of religions. It's all so volatile, and complicated, and confusing that being strict and rigid makes no sense, to me. And spot on with your mention of koans: I really enjoyed our conversation.
As always, love your comments. You're such a certainty below my pieces! Thank you!
Recently read Sheldrake's (perhaps you know his work) book "Science set free". His research is on morphic resonance - thesis being that, counter to the dominant scientific dogma, humans have evolved not only through materialistic (DNA) transmissions and chemical interactions in our brains, but by habits, collective memory, and other non-materialistic influences operating through invisible morphic fields. Like magnetic field, energy field etc. He provides a "whole-istic" study of science, not limited to microscopic things, like atoms, DNA, 100 different types of biases etc, but includes scientific philosophies, from Plato, Einstein, Enlightenment scientists, to more recent dominant philosophies. Fascinating stuff.
I recently heard of a doctor at Duke University Hospital (renowned in the US), who removed her own breasts and ovaries as preventative measure to cancer because of her family's history of cancer. (new research apparently shows that cancer is now found to be almost 100% genetic). Seems like a totally mental and insane solution to me, but "correct" by the current standards. So what's my point. For one, I don't know if the new scientific researches are doing humanity more good or damage. There a deep malaise to the scientific and technological progress. And two, as Sheldrake explains, even the most systematic/mechanical field, like science, is based on assumptions evolved as fact by money, politics and other tools of propagating power. "Knowledge is power" after all. So back to your essay, maybe Kahneman won the Nobel prize for letting people know how better to exploit different biases to manipulate more people, with more efficiency. LOL. Why not.
BTW, Sheldrake has impeccable credentials, wrote tons of research papers, is widely cited in the field, but is dubbed "dangerous" scientist, propagating "misinformation" by the current standard. I learned through him that the trend to regard humans as machine without a soul or spirit has been evolving since the European renaissance. So perhaps we live as the denouement of an inevitable outcome. And back to your essay, I used to work in the art world, and even art has become mostly political propaganda or critique/revolt against society that don't make people feel much, except aversion for the world they live in, and conformity towards a certain ideology. But like you say, art is supposed to elevate the human spirit and soul through its beauty. All in all, i want to say "fuck this shit" to most things about the so-called "advanced" human civilization because they diminish the human nature, and annihilate our need for beauty, spirituality, consciousness and conscience. We are living in anti-human civilization to my eyes. Maybe to the point of your previous essay, maybe AI will make artists produces works that actually feels human, and is relatable to humans.
I write these comments because I"m currently working on a piece that overlaps with your theme. But I ramble on because I don't know how to unite all the pieces of my thoughts into a coherent and easy-to-read essay like yours. And since you break down the themes so well, I make comments on them because I share similar thoughts.
Jisoo! Thank you so much for all these reflections and thoughts and references. I didn't know Sheldrake up until I read your comment (10m ago), and he instantly got inducted into the List of Most Interesting Humans, by me. I'll get his book and read about him more. I sense we two (Sheldrake and I) will agree on many things. You know, my reference to biases and the work of Kahneman and others is by no means a way to endorse their work. I wouldn't have the ability and the knowledge to do that. It's just that I find fascinating that for the first time in centuries, Economics is being treated for what it is: a study of human behavior. Having said this, I don't know whether knowing about these biases will even do us any good, as it's almost impossible to eliminate them. They will only make us more self-conscious. Nevertheless, it's a little step forward towards understanding better what drives what we do. I think in general maybe we're trying too hard to explain the unexplainable. What for, then? Once we have it all explained, what will we do with it? Going back to the theme of my piece, I do know that emotions are considered bad for investing, but 1) I don't know how they do it (and I'm not sure that knowing that would add any value), and 2) maybe they're not so deleterious, maybe we need them and demonizing emotions in investing is wrong, who knows. So it's all a big conundrum. And as always conundrums make you think, which is even more important than finding solutions, to me. :)
I'd love to read your piece, hurry up! Actually, if you need a sparring partner or just some feedback (like we used to do in WOP), please hit me up. It'll be a pleasure for me to be of any help or support or motivation-whatever, if need be. You got the message.
Totally get your point. One of the major points of Sheldrake's is that scientific dogmas has been revolving around getting the soul and spirit out of human beings and seeing us as machines coded with genes. But it doesn't explain the whole of human beings.
Would love to get some feedback on my essay before posting on my substack. Been working on it for a while, almost done. Could I send you a link in a couple days time?
Hi Christin. Thanks for commenting. It's been interesting for myself as well, and it could have been the other way around: virtuosity and vulnerability. But in my case that's the way it resonated. :)
Funny that I never knew or wondered about your profession. You write with the freedom of a retired person, not a high-stress trader. James Bailey wrote a similar piece about the value of emotion in relationships vs investing that you might enjoy on the subject. https://onmoneyandmeaning.substack.com/p/the-invisible-authors-the-visible
Not yet retired! Not even sure I will ever be, I guess. What I can say is that I've learned to cope with stress pretty effectively, although you can't really eliminate it. And I also learned to act freely on the job, with the right detachment. But investing in the stock market is a little different. :) Thank you for pointing me to James' piece, I will sure read it!
I've always found the research on behavioral biases somewhat difficult. Not that I don't agree they exist, but knowing about them doesn't really seem to make it any easier to avoid them. As far as I can tell, even in the limited field of investing (curious what kind of investments you make, maybe we should talk about that), making money doesn't seem to be about simply removing emotion from trades. There's still value in "gut instincts" that are largely products of emotion. Then again, I've only worked in Private Equity for a short time, so my own experience is quite limited.
I also have issues with the framing Kahneman and Tversky used for biases as always things to eliminate for optimal performance. Not sure if you've looked at much 4E cognitive science, but I prefer their framing. The biases (and Systems 1 thinking) are bad for rational based endeavors (investing, academic activities, etc.) but are the basis for experiences like wonder, awe, and personal growth. Ironically, these biases seem to be the basis by which we can change our relationship as agents with our arena, and it's this transcended relationship which seems to allow new insights that often lead to better outcomes in rational pursuits. At least that's how I've read it.
Interesting article. Thanks for writing it.
I’m with you 100% on this, Latham. Biases are there, have always been, and knowing they are doesn’t really add anything to our mental sanity. The fact that they cannot be eliminated maybe makes us even more insane at times, or prone to insanity, if anything. But it’s good, to me, to know some of these things. They’re so natural they make you go like “of course” every time you hear of one of them. Unconscious twists of our behaviors that might make us even more self-conscious, if possible. I’ve done almost 20 years of private equity investing and I know what you’re talking about when you mention gut instincts. Public markets investing, though, is different: you have a price that moves every second and you constantly question whether you’re right or the market’s right, before making a decision. This is an additional layer that a private investment doesn’t have, and can absorb your emotional energy pretty fast. In my case, emotions show up upon price swings largely because I worry about what my investors’ reaction may be. Going back to biases, I’m not really familiar with 4E cognitive science, but in general I’m pro-emotions. It couldn’t be otherwise: if we’re human, we can’t get rid of them (and I don’t want to), so we should try to put them to work for us, somehow.
What an interesting topic Silvio. More and more I think about extremes and how it's not a matter of taking sides, but of embracing each side when it makes sense, and that navigating and balancing sides is where life is happening. And you're spot-on on where emotions are valuable, and when they might not be, but that in the end, they're necessary.
You're also an example in being able to balance these two seemingly opposing sides (work-investing/play, culture and all the rest).
Having the topic fresh through our conversations, reading this also made me think of koans, and that the main reason I like them is because they surpass that logic, certain layer that we tend to rely too much into.
Again, great essay!
Thank you so much, Oscar! I think, as you say, life is a matter of embracing extremes when they're needed, without necessarily taking a side and doing wars of religions. It's all so volatile, and complicated, and confusing that being strict and rigid makes no sense, to me. And spot on with your mention of koans: I really enjoyed our conversation.
As always, love your comments. You're such a certainty below my pieces! Thank you!
https://www.youtube.com/watch?v=sF03FN37i5w&t=197s
https://www.sheldrake.org/research/morphic-resonance/introduction
Recently read Sheldrake's (perhaps you know his work) book "Science set free". His research is on morphic resonance - thesis being that, counter to the dominant scientific dogma, humans have evolved not only through materialistic (DNA) transmissions and chemical interactions in our brains, but by habits, collective memory, and other non-materialistic influences operating through invisible morphic fields. Like magnetic field, energy field etc. He provides a "whole-istic" study of science, not limited to microscopic things, like atoms, DNA, 100 different types of biases etc, but includes scientific philosophies, from Plato, Einstein, Enlightenment scientists, to more recent dominant philosophies. Fascinating stuff.
I recently heard of a doctor at Duke University Hospital (renowned in the US), who removed her own breasts and ovaries as preventative measure to cancer because of her family's history of cancer. (new research apparently shows that cancer is now found to be almost 100% genetic). Seems like a totally mental and insane solution to me, but "correct" by the current standards. So what's my point. For one, I don't know if the new scientific researches are doing humanity more good or damage. There a deep malaise to the scientific and technological progress. And two, as Sheldrake explains, even the most systematic/mechanical field, like science, is based on assumptions evolved as fact by money, politics and other tools of propagating power. "Knowledge is power" after all. So back to your essay, maybe Kahneman won the Nobel prize for letting people know how better to exploit different biases to manipulate more people, with more efficiency. LOL. Why not.
BTW, Sheldrake has impeccable credentials, wrote tons of research papers, is widely cited in the field, but is dubbed "dangerous" scientist, propagating "misinformation" by the current standard. I learned through him that the trend to regard humans as machine without a soul or spirit has been evolving since the European renaissance. So perhaps we live as the denouement of an inevitable outcome. And back to your essay, I used to work in the art world, and even art has become mostly political propaganda or critique/revolt against society that don't make people feel much, except aversion for the world they live in, and conformity towards a certain ideology. But like you say, art is supposed to elevate the human spirit and soul through its beauty. All in all, i want to say "fuck this shit" to most things about the so-called "advanced" human civilization because they diminish the human nature, and annihilate our need for beauty, spirituality, consciousness and conscience. We are living in anti-human civilization to my eyes. Maybe to the point of your previous essay, maybe AI will make artists produces works that actually feels human, and is relatable to humans.
I write these comments because I"m currently working on a piece that overlaps with your theme. But I ramble on because I don't know how to unite all the pieces of my thoughts into a coherent and easy-to-read essay like yours. And since you break down the themes so well, I make comments on them because I share similar thoughts.
Jisoo! Thank you so much for all these reflections and thoughts and references. I didn't know Sheldrake up until I read your comment (10m ago), and he instantly got inducted into the List of Most Interesting Humans, by me. I'll get his book and read about him more. I sense we two (Sheldrake and I) will agree on many things. You know, my reference to biases and the work of Kahneman and others is by no means a way to endorse their work. I wouldn't have the ability and the knowledge to do that. It's just that I find fascinating that for the first time in centuries, Economics is being treated for what it is: a study of human behavior. Having said this, I don't know whether knowing about these biases will even do us any good, as it's almost impossible to eliminate them. They will only make us more self-conscious. Nevertheless, it's a little step forward towards understanding better what drives what we do. I think in general maybe we're trying too hard to explain the unexplainable. What for, then? Once we have it all explained, what will we do with it? Going back to the theme of my piece, I do know that emotions are considered bad for investing, but 1) I don't know how they do it (and I'm not sure that knowing that would add any value), and 2) maybe they're not so deleterious, maybe we need them and demonizing emotions in investing is wrong, who knows. So it's all a big conundrum. And as always conundrums make you think, which is even more important than finding solutions, to me. :)
I'd love to read your piece, hurry up! Actually, if you need a sparring partner or just some feedback (like we used to do in WOP), please hit me up. It'll be a pleasure for me to be of any help or support or motivation-whatever, if need be. You got the message.
Totally get your point. One of the major points of Sheldrake's is that scientific dogmas has been revolving around getting the soul and spirit out of human beings and seeing us as machines coded with genes. But it doesn't explain the whole of human beings.
Would love to get some feedback on my essay before posting on my substack. Been working on it for a while, almost done. Could I send you a link in a couple days time?
Of course! Hit me on whatsapp. I guess we're connected there. :)
I think it's so interesting how you paired vulnerability with virtuosity! Hrmmm...
Hi Christin. Thanks for commenting. It's been interesting for myself as well, and it could have been the other way around: virtuosity and vulnerability. But in my case that's the way it resonated. :)