Quotessence
Home / Quotes / Quote by Daniel Kahneman

Quote by Daniel Kahneman

“The illusion of skill is not only an individual aberration; it is deeply ingrained in the culture of the [investment management] industry.”

Quote by Daniel Kahneman

Create image

Author

Daniel Kahneman
Daniel Kahneman

Daniel Kahneman is a renowned psychologist known for his work in behavioral economics and decision theory. Born on March 5, 1934, he is of Israeli descent and has worked and studied in Israel, the United States, and Canada. Kahneman's research has had a profound impact on modern economics, psychology, and business decision-making. more

You May Also Like

“To know whether you can trust a particular intuitive judgment, there are two questions you should ask: Is the environment in which the judgment is made sufficiently regular to enable predictions from the available evidence? The answer is yes for diagnosticians, no for stock pickers. Do the professionals have an adequate opportunity to learn the cues and the regularities? The answer here depends on the professionals' experience and on the quality and speed with which they discover their mistakes.”

KnowsShouldMadeTwoAsksOpportunityAnswersMistakeQualityEnvironmentParticularDependsJudgmentEvidenceAvailableSpeedPredictionsIntuitiveAdequateRegularityOpportunities To Learn
Author:Daniel Kahneman
Create image

“A realistic definition of risk recognizes the potential loss of capital through inflation and taxes, and would include at least the following two factors: The probability that the investment you chose will preserve your capital over the time you intend to invest your funds. The probability the investments you select will outperform alternative investments for this period.”

TwoLossRiskPeriodsTaxesInvestmentDefinitionsFollowingFactorsAlternativesPreservesFundRealisticProbabilityInflationSelect
Book:Contrarian Investment Strategies in the Next Generation
Create image

“As value investors, our business is to buy bargains that financial market theory says do not exist. We've delivered great returns to our clients for a quarter century-a dollar invested at inception in our largest fund is now worth over 94 dollars, a 20% net compound return. We have achieved this not by incurring high risk as financial theory would suggest, but by deliberately avoiding or hedging the risks that we identified.”

ValuesRiskCenturyTheoryReturnDollarsFinancialFundInvestorsQuartersClientsAvoidingBargainsCompoundsFinancial MarketsInceptionHigh RiskIncurringHedging
Author:Seth Klarman
Create image