Wisdom....................

 

I am not at all persuaded by skepticism.

-Arnold Kling, from this substack edition

It's simple, really...................

 

Experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime.  A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind that loves diagnosis involving multiple variables.  And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past.

-Charlie Munger

Bet......................

 Our fingers are built more for feeling than fighting.
Nerve endings prioritized over talons or claws.

Our relatively modest strength.
Our long, vulnerable road to adulthood.

Our species' success is the story of betting
on understanding over brutality.

It's the wise, patient bet.

-Jarod K. Anderson,  Soft

The unknowable future.........

 Are stock prices too high? I don’t know, and neither do you. I am too much of an Efficient Markets adherent to believe otherwise. Though, I am also Schumpeterian. So, yeah, we just may be in a new AI-powered economy where we will be much more productive, and the firms best poised to make money off this are worth a lot—and will be worth much more than what they are now. But until we figure many things out, and that could take decades (possibly many decades), there will be some froth along the way. We will make big bets on the wrong horses. Or some companies that seem poised for greatness will falter after a while. Or companies that seem unstoppable now may not exist then. Who the winners will be and what winning even looks like is unknowable right now.

-Allison Schrager

predictions...........................

 Predicting what the world will look like fifty years from now is impossible.  But predicting that people will still respond to greed, fear, opportunity, exploitation, risk, uncertainty, tribal affiliation, and social persuasion in the same way is a bet I'd take.

-Morgan Housel, Same as Ever: A Guide to What Never Changes

It's the vision thing.............................

In the short-run it’s difficult to see an easy way out of the current geopolitical nightmare.

In the long-run it’s always a bad idea to bet against the power of the human spirit.

-Ben Carlson, from here

Pascal's wager........................

 If there is a God, He is infinitely incomprehensible, since, having neither parts nor limits, He has no affinity to us. We are then incapable of knowing either what He is or if He is....

..."God is, or He is not." But to which side shall we incline? Reason can decide nothing here. There is an infinite chaos which separated us. A game is being played at the extremity of this infinite distance where heads or tails will turn up. What will you wager? According to reason, you can do neither the one thing nor the other; according to reason, you can defend neither of the propositions.

Do not, then, reprove for error those who have made a choice; for you know nothing about it. "No, but I blame them for having made, not this choice, but a choice; for again both he who chooses heads and he who chooses tails are equally at fault, they are both in the wrong. The true course is not to wager at all."

Yes; but you must wager. It is not optional. You are embarked. Which will you choose then? Let us see. Since you must choose, let us see which interests you least. You have two things to lose, the true and the good; and two things to stake, your reason and your will, your knowledge and your happiness; and your nature has two things to shun, error and misery. Your reason is no more shocked in choosing one rather than the other, since you must of necessity choose. This is one point settled. But your happiness? Let us weigh the gain and the loss in wagering that God is. Let us estimate these two chances. If you gain, you gain all; if you lose, you lose nothing. Wager, then, without hesitation that He is.

-Blaise Pascal, Pensees  (easy version is here)

Believe.........................

This world's gone crazy
It's hard to believe
That tomorrow will be better than today
Believe it anyway

-Martina McBride

Betting versus predicting...........

Is Warren Buffet a Guru? Maybe. But he would say no. He would say that he has a process in place that guards against magical thinking, like predicting the direction of the market. He analyzes companies better than most, and he makes huge bets on the ones he thinks will be winners in the future. But he's betting - he's not predicting. There's a difference.

-T. Erik Conley, as cut and pasted from here

Risk, decisions, and consequences............

Because decisions are made so quickly, players don't have the luxury of time in coordinating their rational, long-term, strategic plans with their decisions at the poker table.  And all those decisions made under severe time constraints have immediate consequences expressed as an exchange of poker chips.  The constant exchange of poker chips reminds players that there is risk in every decision.  Of course, the direction in which the chips flow in the short term only loosely correlates with decision quality.  You can win a hand after making bad decisions and lose a hand after making good ones.  But the mere fact that chips are changing hands is a reminder that every decision has consequences - that all those execution decisions you make along the way really matter.

-Annie Duke,  Thinking in Bets:  Making Smarter Decisions When You Don't Have All the Facts

image via

Calibration and accountability.................

We don't win bets by being in love with our own ideas.  We win bets by relentlessly striving to calibrate our beliefs and predictions about the future to more accurately represent the world.   In the long run, the more objective person will win against the more biased person.  In that way, betting is a form of accountability to accuracy.  Calibration requires an open-minded consideration of diverse points of view and alternative hypotheses.

-Annie Duke,  Thinking In Bets:  Making Smarter Decisions When You Don't Have All the Facts

Schadenfreude.........................

Taking credit for a win lifts our personal narrative.  So too does knocking down a peer by finding them at fault for a loss.  That's schadenfreude:  deriving pleasure from someone else's misfortune.  Schadenfreude is basically the opposite of compassion.
     Ideally, our happiness would depend on how things turn out for us regardless of how things turn out for anyone else.  Yet, on a fundamental level, fielding someone's bad outcome as their fault feels good to us.  On a fundamental level, fielding someone's good outcome as luck helps our narrative alone.

-Annie Duke:  Thinking In Bets:  Making Smarter Decisions When You Don't Have All the Facts

On getting comfortable with uncertainty.....

     Poker players live in a world where that risk is made explicit.  They can get comfortable with uncertainty because they put it up front in their decisions.  Ignoring the risk and uncertainty in every decision might make us feel better in the short run, but the cost to the quality of our decision-making can be immense.  If we can find ways to become more comfortable with uncertainty, we can see the world more accurately and be better for it.

-Annie Duke,  Thinking In Bets:  Making Smarter Decisions When You Don't Have All The Facts

Resulting.............................

     Pete Carroll was a victim of our tendency to equate the quality of a decision with the quality of its outcome.  Poker players have a word for this: "resulting."  When I started playing poker, more experienced players warned me about the dangers of resulting, cautioning me to resist the temptation to change my strategy just because a few hands didn't turn out well in the short run. 
    ... Why are we so bad at separating luck and skill?  Why are we so uncomfortable knowing that results can be beyond our control? 

-Annie Duke,  Thinking in Bets:  Making Smarter Decisions When You Don't Have All the Facts