Top 223 Quotes & Sayings by Daniel Kahneman - Page 4

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

Acquisition of skills requires a regular environment, an adequate opportunity to practice, and rapid and unequivocal feedback about the correctness of thoughts and actions.

When you are under time pressure for a decision, you need to follow intuition.

When people think of the outcomes of their decisions, they think much more short term than that. They think in terms of gains and losses.

Some memories come with a very compelling sense of truth about them. And that happens to be the case even with memories that are not true.

Groups tend to be more extreme than individuals.

A large portion of the weekend effects is explained by differences in the amount of time spent with friends or family between weekends and weekdays.

We associate leadership with decisiveness. That perception of leadership pushes people to make decisions fairly quickly, lest they be seen as dithering and indecisive.

Many people will admit that they made a mistake [putting money in dot-coms or telecoms at their peak] But that doesn’t mean that they’ve changed their mind about anything in particular. It doesn’t mean that they are now able to avoid that mistake.

Doubts are suppressed by groups... But remember that the internal incentives that shape how the group perceives risks and rewards may be very different from the reality of the risks and rewards in the external marketplace. Those incentives can distort risk perception.

You should expect little or nothing from Wall Street stock pickers who hope to be more accurate than the market in predicting the future of prices. And you should not expect much from pundits making long-term forecasts.

We were required to predict a soldier's performance in officer training and in combat, but we did so by evaluating his behavior over one hour in an artificial situation. This was a perfect instance of a general rule that I call WYSIATI, "What you see is all there is." We had made up a story from the little we knew but had no way to allow for what we did not know about the individual's future, which was almost everything that would actually matter. When you know as little as we did, you should not make extreme predictions like "He will be a star."

The premise of this book is that it is easier to recognize other people's mistakes than your own.

A person who has not made peace with his losses is likely to accept gambles that would be unacceptable to him otherwise.

Lucky risk takers use hindsight to reinforce their feeling that their gut is very wise. Hindsight also reinforces others' trust in that individual's gut.

Individual investors predictably flock to stocks in companies that are in the news.

Each additional day together is a gift. The end of the day means the end of hostilities, the recognition that the underlying shared values and commitment to the relationship trump the need for one last dig or self-righteous justification.

There are some conditions where you have to trust your intuition.

Mood evidently affects the operation of System 1: when we are uncomfortable and unhappy, we lose touch with our intuition. These findings add to the growing evidence that good mood, intuition, creativity, gullibility, and increased reliance on System 1 form a cluster. At the other pole, sadness, vigilance, suspicion, an analytic approach, and increased effort also go together. A happy mood loosens the control of System 2 over performance: when in a good mood, people become more intuitive and more creative but also less vigilant and more prone to logical errors.

People are very good [at] thinking about agents. The mind is set really beautifully to think about agents. Agents have traits. Agents have behaviors. We understand agents. We form global impression of their personalities. We are really not very good at remembering sentences where the subject of the sentence is an abstract notion.

I don't try to be clever at all. The idea that I could see what no one else can is an illusion.

The confidence that individuals have in their beliefs depends mostly on the quality of the story they can tell about what they see, even if they see little.

Question: So investors shouldn't delude themselves about beating the market? Answer: "They're just not going to do it. It's just not going to happen."

One study found that people who just thought about watching their favorite movie actually raised their endorphin levels by 27 percent.

You are more likely to learn something by finding surprises in your own behavior than by hearing surprising facts about people in general.

The extra daily social time of 1.7 hours in weekends raises average happiness by about 2%.

I would be wary of experts' intuition, except when they deal with something that they have dealt with a lot in the past.

There is general agreement among researchers that nearly all stock pickers, whether they know it or not-and few of them do-are playing a game of chance.

People who are cognitively busy are also more likely to make selfish choices, use sexist language, and make superficial judgments in social situations.

You should not take your intuitions at face value.

Endlessly amused by people's minds.

We are often confident even when we are wrong, and an objective observer is more likely to detect our errors than we are.

You can always find an evolutionary quotation for anything. But the question is whether it's functional, which is not the same as being evolutionary.

A general limitation of the human mind is its imperfect ability to reconstruct past states of knowledge, or beliefs that have changed. Once you adopt a new view of the world (or any part of it), you immediately lose much of your ability to recall what you used to believe before your mind changed.

It is only a slight exaggeration to say that happiness is the experience of spending time with people you love and who love you.

Unfortunately, skill in evaluating the business prospects of a firm is not sufficient for successful stock trading, where the key question is whether the information about the firm is already incorporated in the price of the stock. Traders apparently lackthe skill to answer this crucial question, but they appear to be ignorant of their ignorance.

you know you have made a theoretical advance when you can no longer reconstruct why you failed for so long to see the obvious.

An executive might have a very strong intuition that a given product has promise, without considering the probability that a rival is already ahead in developing the same product.

Most things that couples disagree upon aren't worth more than a day's combat.

Managers think of themselves as captains of a ship on a stormy sea. Risk for them is danger, but they are fighting it, very controlled.

The conclusion is straightforward : self-control requires attention and effort.

... sometimes when you are asked a question that is difficult, the mind doesn't stay silent if it doesn't have the answer. The mind produces something, and what it produces very characteristically is the answer to an easier but related question.

An individual who expresses high confidence probably has a good story, which may or may not be true.