"The Undoing Project," by Michael Lewis

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Howard Donnelly
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"The Undoing Project," by Michael Lewis

Post by Howard Donnelly »

I just finished reading "The Undoing Project," by Michael Lewis. It's very interesting.

"How a Nobel Prize–winning theory of the mind altered our perception of reality. Forty years ago, Israeli psychologists Daniel Kahneman and Amos Tversky wrote a series of breathtakingly original studies undoing our assumptions about the decision-making process. Their papers showed the ways in which the human mind erred, systematically, when forced to make judgments in uncertain situations. Their work created the field of behavioral economics, revolutionized Big Data studies, advanced evidence-based medicine, led to a new approach to government regulation, and made much of Michael Lewis’s own work possible. Kahneman and Tversky are more responsible than anybody for the powerful trend to mistrust human intuition and defer to algorithms."

The Undoing Project: A Friendship That Changed Our Minds
http://www.barnesandnoble.com/w/the-und ... ctInfoTabs

If you've read the book, I would love to hear your thoughts about it. In addition, do you have any general comments about the work of Daniel Kahneman and Amos Tversky?

Thank you,
Howard
larryswedroe
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Re: "The Undoing Project," by Michael Lewis

Post by larryswedroe »

I second Howard's recommendation as I just finished the book last night. The insights are great into how even when we know there are biases we fall prey to them, even Kahneman admitted he did. And it's fascinating relationship between Tversky and Kahneman, Their work led to the development of the whole field of behavioral finance

Larry
sid hartha
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Re: "The Undoing Project," by Michael Lewis

Post by sid hartha »

Thanks guys. I saw him on Charlie Rose and this does look like a great book. I will try and check it out.
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Christine_NM
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Re: "The Undoing Project," by Michael Lewis

Post by Christine_NM »

I read it because I enjoyed Thinking. Fast and Slow. Of course Lewis is not as good as Kahneman at explaining biases, heuristics, and the like. But he does a good job with light bio.
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Levett
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Re: "The Undoing Project," by Michael Lewis

Post by Levett »

Coming to The Undoing Project, as Christine did, through Thinking, Fast and Slow, provides an additional dimension to Lewis's book.

Lewis does a fine job of detailing the complexities, intellectual and emotional, of the Kahneman/Tversky collaboration and separation. At times, it makes for painful reading.

Lev
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Howard Donnelly
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Re: "The Undoing Project," by Michael Lewis

Post by Howard Donnelly »

There is a terrific chapter about behavioral economics in The Bogleheads' Guide to Investing, Second Edition. See Chapter 19, page 223. Kahneman and Tversky's work is discussed.
J295
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Re: "The Undoing Project," by Michael Lewis

Post by J295 »

I took this free online course. You might enjoy it.

https://www.class-central.com/mooc/424/ ... l-behavior
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Lieutenant.Columbo
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Re: "The Undoing Project," by Michael Lewis

Post by Lieutenant.Columbo »

larryswedroe wrote:...The insights are great into how even when we know there are biases we fall prey to them, even Kahneman admitted he did. And it's fascinating relationship between Tversky and Kahneman, Their work led to the development of the whole field of behavioral finance
Larry,
Does your (cloudy) crystal ball say whether future advancements in Behavioral Finance/Economics will one day figure out (and teach investors) how to neutralize the behavioral component of Small-Value risk/premium?
Thanks
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arcticpineapplecorp.
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Re: "The Undoing Project," by Michael Lewis

Post by arcticpineapplecorp. »

I haven't read a Michael Lewis book, so I just started with Liar's Poker (about halfway through). I intend to read the rest of his books eventually. For those interested in this subject, there was a good interview with Michael Lewis I heard a week ago on Freakonomics podcast. The podcast is about many of Lewis's works, but also and more specifically about some of the things that went into this latest book. I found it very interesting. Learned some things about Tversky and Kahneman. Any of the following links will get you there:

http://freakonomics.com/podcast/men-sta ... evolution/
http://freakonomics.com/podcast-tag/the ... g-project/
http://freakonomics.com/podcast-tag/amos-tversky/

Enjoy!
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Fallible
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Re: "The Undoing Project," by Michael Lewis

Post by Fallible »

Howard Donnelly wrote:There is a terrific chapter about behavioral economics in The Bogleheads' Guide to Investing, Second Edition. See Chapter 19, page 223. Kahneman and Tversky's work is discussed.
Agree. And that chapter, titled "Mastering Your Investments Means Mastering Your Emotions," was written around 2006, when behavioral economics was not yet that well known, or at least not a common topic, among average investors. It also begins with the importance of good emotions in our lives so that we can then balance those against the not-so-good emotions when it comes to money. And it notes that awareness of emotional pitfalls is one thing, while preventing them from ruining our investments is another - and then it suggests ways to "escape the emotional traps." Kudos to authors Taylor Larimore, Mel Lindauer, and Michael LeBoeuf!

I also liked the Lewis book and wish we could've had Tversky's look back with the advantage of time as we have Kahneman's. A Lewis interview with the dynamic Tversky might have brought new insight and even deeper understanding.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
petulant
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Re: "The Undoing Project," by Michael Lewis

Post by petulant »

I saw this at the hipster bookstore the other day. I didn't pick it up because in both undergrad and graduate school I got hit over the head with these guys all the time.

If you're an avid reader and haven't heard of them, pick the book up and read it.
dcwilco
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Re: "The Undoing Project," by Michael Lewis

Post by dcwilco »

The Undoing Project is a good read. I really enjoy Lewis's simple vernacular writing style. For all those who read Thinking Fast and Slow, the ideas presented won't be new, but you get a much more vivid sense of how Amos Tversky and Daniel Kahneman formed an intellectual yin yang. To me, Tversky is the yang (light) and Kahneman is the yin (dark). This isn't as clear in Kahneman's book, Thinking Fast and Slow, nor is the rupture that ultimately occurs between the two.

I'll be keeping both books in my permanent collection.
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market timer
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Re: "The Undoing Project," by Michael Lewis

Post by market timer »

What is the best order to read Thinking Fast and Slow and The Undoing Project? I have them both on my Kindle.
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Re: "The Undoing Project," by Michael Lewis

Post by S&L1940 »

J295 wrote:I took this free online course. You might enjoy it.
https://www.class-central.com/mooc/424/ ... l-behavior
looked it up, signed up, curiosity keeps me going
thanks for the info
Don't it always seem to go * That you don't know what you've got * Till it's gone
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Re: "The Undoing Project," by Michael Lewis

Post by nedsaid »

Okay, I admit it. I am not a live human being at all, just a cleverly written computer algorithm that generates these posts. It is programmed to tell a random joke and to be wishy-washy 30% on certain opinions to make readers believe that I am human. Sarcasm is also randomly interspersed in the posts. Furthermore, the program is programmed to "learn." Artificial intelligence is here to stay, prepare to be assimilated!
A fool and his money are good for business.
S&L1940
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Re: "The Undoing Project," by Michael Lewis

Post by S&L1940 »

nedsaid wrote:Okay, I admit it. I am not a live human being at all, just a cleverly written computer algorithm that generates these posts. It is programmed to tell a random joke and to be wishy-washy 30% on certain opinions to make readers believe that I am human. Sarcasm is also randomly interspersed in the posts. Furthermore, the program is programmed to "learn." Artificial intelligence is here to stay, prepare to be assimilated!
I knew it, not a drop of human kindness or empathy or native intelligence in any of your (its) 6000+ posts
keep yourself well oiled and have a power back-up, just in case...
Don't it always seem to go * That you don't know what you've got * Till it's gone
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nedsaid
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Re: "The Undoing Project," by Michael Lewis

Post by nedsaid »

S&L1940 wrote:
nedsaid wrote:Okay, I admit it. I am not a live human being at all, just a cleverly written computer algorithm that generates these posts. It is programmed to tell a random joke and to be wishy-washy 30% on certain opinions to make readers believe that I am human. Sarcasm is also randomly interspersed in the posts. Furthermore, the program is programmed to "learn." Artificial intelligence is here to stay, prepare to be assimilated!
I knew it, not a drop of human kindness or empathy or native intelligence in any of your (its) 6000+ posts
keep yourself well oiled and have a power back-up, just in case...
LOL!!! LOL!!!

I was just having a bit of fun, of course. What I am reacting to is the belief that algorithms will solve everything and that human reasoning by itself is unreliable. I remember that John Bogle predicted that the so-called quantitative funds would eventually underperform the indexes. The markets are dynamic and there gets to be a point where old rules don't work anymore.

I guess I feel a bit like Dr. McCoy on Star Trek who has an innate distrust of machines.
A fool and his money are good for business.
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amphora
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Re: "The Undoing Project," by Michael Lewis

Post by amphora »

market timer wrote:What is the best order to read Thinking Fast and Slow and The Undoing Project? I have them both on my Kindle.
Read Thinking Fast and Slow first. I find that Michael Lewis' books are a made for Hollywood version of important highbrow topics. Read Thinking Fast and Slow for the actual ideas; Read The Undoing Project for the human interest angle.
S&L1940
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Re: "The Undoing Project," by Michael Lewis

Post by S&L1940 »

nedsaid wrote:
S&L1940 wrote:
nedsaid wrote:Okay, I admit it. I am not a live human being at all, just a cleverly written computer algorithm that generates these posts. It is programmed to tell a random joke and to be wishy-washy 30% on certain opinions to make readers believe that I am human. Sarcasm is also randomly interspersed in the posts. Furthermore, the program is programmed to "learn." Artificial intelligence is here to stay, prepare to be assimilated!
I knew it, not a drop of human kindness or empathy or native intelligence in any of your (its) 6000+ posts
keep yourself well oiled and have a power back-up, just in case...
LOL!!! LOL!!!

I was just having a bit of fun, of course. What I am reacting to is the belief that algorithms will solve everything and that human reasoning by itself is unreliable. I remember that John Bogle predicted that the so-called quantitative funds would eventually underperform the indexes. The markets are dynamic and there gets to be a point where old rules don't work anymore.

I guess I feel a bit like Dr. McCoy on Star Trek who has an innate distrust of machines.
OH, never mind, keep posting, you do good stuff regardless of the source
although your avatar looks suspiciously like one of the aliens that abducted me
Don't it always seem to go * That you don't know what you've got * Till it's gone
leehamster
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Re: "The Undoing Project," by Michael Lewis

Post by leehamster »

I finished the audio book last week. Michael Lewis has matched up with a good actor/reader, Dennis Boutsikaris, who reads a lot of popular books these days. He has a great delivery for the Lewis mix of brainy and human stories. Highly recommend this version.
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