Humans are Unreliable Experts,
Getting in the Way of Outstanding Performance

Categories Author: Jim O'Shaughnessy, Insight, Investing

“What ails the truth is that it is mainly uncomfortable, and often dull.
The human mind seeks something more amusing, and more caressing.”

— H. L. Mencken

Given our current state of affairs, it seems like right now is a very good time for a refresher on Human Behavior — the one predictable thing in the market. Continue reading “Humans are Unreliable Experts,
Getting in the Way of Outstanding Performance”

7 Traits for Investing Greatness:
#6 Probability vs. Possibility
#7 Discipline

Categories Author: Jim O'Shaughnessy, Investing

As I cautioned earlier (see Parts 1, 2, and 3), it’s harder than you’d think to stick with an Active approach to investing. Traits #6 and #7 (of 7 total) outline two more ways for Active investors to achieve greatness over the long term: Continue reading “7 Traits for Investing Greatness:
#6 Probability vs. Possibility
#7 Discipline”

7 Traits for Investing Greatness:
#2 Process, not Outcome
#3 Ignore Forecasts & Predictions

Categories Author: Jim O'Shaughnessy, Investing

Active investing is hard. Plus, there’s a strong temptation to join the “masses going Passive” — or else get left behind. Following up on the first part of this article, here are the 2nd and 3rd Traits (of 7 total) that I think are necessary to be a successful long-term Active investor: Continue reading “7 Traits for Investing Greatness:
#2 Process, not Outcome
#3 Ignore Forecasts & Predictions”

7 Traits for Investing Greatness:
#1 Long-Term Perspective

Categories Author: Jim O'Shaughnessy, Investing

Years of experience have taught me that becoming a successful Active investor is extremely difficult, requires a very specific set of characteristics, and that many investors attempting to actively manage their portfolios today lack the emotional and personality traits necessary for success.

Investors with Passive portfolios — presuming they are adequately and broadly diversified — face only one real point of failure: reacting emotionally to a market selloff and selling their holdings, often near a market bottom.  Continue reading “7 Traits for Investing Greatness:
#1 Long-Term Perspective”

Book Marks:
4 Books About How to Think Better

Categories Author: Patrick O'Shaughnessy

“Summer” is over for many of us, sorry to say, and TMI1 has left our brains prone to being led astray over the past couple of months. If you’ve already read through the Summer Reading List prescribed in this post, here are some books that help us think in ways that make us less prone to errors — and/or hasty decisions — as we begin to wind down 2017.

Happy Reading,
— Patrick

Continue reading “Book Marks:
4 Books About How to Think Better”