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This Excellent Author is Back with an Amazing New Book

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Michael Lewis, author of Moneyball, revisits market inefficiencies and why they exist in his new book The Undoing Project. Here William Easterly reviews the new book for The Wall Street Journal. Easterly calls the book “a spectacular account of two great men who faced up to uncertainty and the limits of human reason.”

Easterly writes:

Michael Lewis’s brilliant book celebrates Daniel Kahneman andAmos Tversky, Israeli-American psychologists who are our age’s apostles of doubt about human reason. The timing is fortunate, given that overconfident experts may have caused and then failed to predict such momentous events as Brexit and the election of Donald Trump.

Mr. Kahneman and Tversky (who died in 1996) first started working together in 1969. They were well-matched. The Holocaust survivor Mr. Kahneman chronically doubted even himself. The brash Tversky targeted his doubts toward others, especially (as one acquaintance noted) “people who don’t know the difference between knowing and not knowing.” Testing people with quizzes in their laboratory, they found a host of “cognitive biases” afflicting rational thinking.

One bias they found is that we underestimate uncertainty. In hindsight bias, for example, test subjects misremembered their own predictions as being correct. As Tversky explained, “we find ourselves unable to predict what will happen; yet, after the fact we explain what did happen with a great deal of confidence. . . . It leads us to believe that there is a less uncertain world than there actually is.” Mr. Lewis is outraged by McKinsey & Co. coaching their consultants to radiate certainty while billing clients huge fees to forecast such unknowable variables as the future price of oil. The work of Tversky and Mr. Kahneman convinced Mr. Lewis that, as he puts it when summarizing the view of a jaded former consultant, such “confidence was a sign of fraudulence.”

Read more here.

Michael Lewis on new book, “The Undoing Project”

 

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E.J. Smith

Editor-in-Chief
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com.