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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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Thinking Fast and Slow

Posted by Muthu on December 17, 2016

I had many queries on the piece shared yesterday from Michael Lewis’s latest book.

Some of you have asked as to what is the best book to understand the work of Daniel Kahneman and Amos Tversky.

Daniel Kahneman has written a master piece called ‘Thinking Fast and Slow’. I would sincerely recommend this book to all of you.

I’ve shared below some quotes from the same. I hope this would interest you to go and grab the book.

“The idea that the future is unpredictable is undermined every day by the ease with which the past is explained.

We are prone to overestimate how much we understand about the world and to underestimate the role of chance in events.

An investment said to have an 80% chance of success sounds far more attractive than one with a 20% chance of failure. The mind can’t easily recognize that they are the same.

The easiest way to increase happiness is to control your use of time.

The brains of humans contain a mechanism that is designed to give priority to bad news.

If you care about being thought credible and intelligent, do not use complex language where simpler language will do.

Money does not buy you experiential happiness, but lack of money certainly buys you misery.

We are far too willing to reject the belief that much of what we see in life is random.

We can’t live in a state of perpetual doubt, so we make up the best story possible and we live as if the story were true.

A reliable way of making people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth.

The world makes much less sense than you think. The coherence comes mostly from the way your mind works.

An inability to be guided by a “healthy fear” of bad consequences is a disastrous flaw.

An unbiased appreciation of uncertainty is a cornerstone of rationality—but it is not what people and organizations want. Extreme uncertainty is paralyzing under dangerous circumstances, and the admission that one is merely guessing is especially unacceptable when the stakes are high. Acting on pretended knowledge is often the preferred solution.”

Buy the book and read.

One Response to “Thinking Fast and Slow”

  1. Deepak Srivastava said

    Good evening Mr Muthu

    Have been investing Rs 4000 every month in 4 mutual funds and the asset value is Rs. 1 lakh so nearly 2 years of investment. The returns on all 4 are ranging between 0.50% to 1.8% which is in 2 years. Is the returns low in the initial 2 to 3 years and then tend to grow exponentially in coming years. Would just like to know as the returns are less than 1% per annum currently. regards, Deepak

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