Keynes's way to wealth: Timeless investment lessons: Timeless Investment Lessons from The Great Economist By John Wasik

    Keynes's

    John Wasik ´ 3 review

    Keynes's way to wealth: Timeless investment lessons: Timeless Investment Lessons from The Great Economist : Wasik, John: : Libros Keynes's way to wealth: Timeless investment lessons: Timeless Investment Lessons from The Great Economist

    Good read.insightful. Keynes's way to wealth: Timeless investment lessons: Timeless Investment Lessons from The Great Economist Fairly basic. I felt that there was only superficial dicussion of how Keynes's used his economic wisdom to make investment decisions. Keynes's way to wealth: Timeless investment lessons: Timeless Investment Lessons from The Great Economist Wasik (W) and Bogle's (B) introduction give a first rate analysis of Keynes's approach to financial decision making.Bogle correctly concentrates on section 7 of Chapter 12(pp.160 161 of the GT) but misses the important definition of uncertainty as an inverse (negative)function of Keynes's weight of the argument (evidence) concept from chapters 6 and 26 of the A Treatise on Probability on p.148 of the GT.This means that Confidence is a positive function of the weight of the argument(evidence) and a negative function of uncertainty.This means that there is a second variable in Keynes's formal decision making apparatus besides the expected probability.Animal spirits ,one's optimism,pessimism,or spontaneous urge to act,is an emotional response on the part of the financial decisionmaker to the amount of relevant knowledge he has versus the amount he could obtain if he were to wait for the future to arrive.There are thus careful distinctions that must be drawn between confidence,uncertainty,expectations,and animal spirits.Keynes's approach to decision making is very different from that of Kaheman Tversky(K T),Shiller Akerlof(S A),and Thaler(T),who are all advocates of using Subjective Expected Utility (SEU ) Theory as the normative approach to decision making.Keynes completely rejects SEU theory as a normative goal except as a very special case.SEU is merely a advanced version of Jeremy Bentham's approach explicitly rejected by G E Moore and Keynes by 1903.The K T,A S ,and T approach regards issues of animal spirits,framing,framing effects,anchoring ,representativeness,overconficdence overoptimism ,and many other behaviorist results as being biases and errors on the part of the decision maker that could be corrected if only the decision maker would become a good Bayesian Ramsey De Finetti Savage type statistician.He could then correctly solve problems like the Linda the bank teller problem or the Blue Green taxi problem and avoid all of the erroneous mistakes that result.Thus, Mr. De Cecco's claim on p.92 concerning the equivalence of the K T and Keynes approach to decision making and Wasik's conclusion on pp.101 102 directly conflict with Keynes 's approach.Keynes rejects the biases and errors approach for the exact same reasons that LJ Cohen did.The K T approach assumes linear and additive probabilities and views the non linear and non additive decision weights as incorrect manifestations of decision makers ill trained in probability and statistics applications. Keynes's way to wealth: Timeless investment lessons: Timeless Investment Lessons from The Great Economist Learned a lot, and confirmed many things with this fine book. Pick companies that you know something about and have confidence in their long term outlook and stick with them through thick and thin. Keynes's way to wealth: Timeless investment lessons: Timeless Investment Lessons from The Great Economist I expected from this book. It was too superficial and basic for my liking as I would have expected a technical book rather than a book for the masses particular as the subject matter, at face value, seems niche. Keynes's way to wealth: Timeless investment lessons: Timeless Investment Lessons from The Great Economist