Thursday, February 11, 2010

Motley Fool podcast

References: (name looks stupid but genuine investing site)
Amazon Book "How We Decide"

Was listening to the podcast of Motley Fool, it focus on US market but I still listen it for mostly news and their views on them. This week, there were interviewing a book writer for "How We Decide" and interesting he mentions there are 2 broad decisions, math problems and mysteries. The first step to making the right decision, then, is accurately diagnosing the problem and figuring out which brain system to rely on. Should we trust our intuition or calculate the probabilities? We always need to be thinking about how we think.

More Thoughts

In the end, they asked what do he invest in and he invests in low-cost index fund. I like that idea that there are math problems which you can logically calculate and decide and mysteries which are mostly intuition. Currently, I prefer to look for math problems in investing, till I can trust my intuition. Judging from my mistakes in Cacola, I need at additional 50% Margin of Safety, in addition to the 20% I had given myself then. Sentimental or technical investing isn't for me yet till I got more capital to generate a worthy returns for the effort put in.

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DreamerZ said...

i hope u r not refering to the margin of safety Warren Buffett talks abt.

At least i have a different understanding.

Thien Rong said...

Yes, was refering to the margin of safety similar to Warren Buffett. When I bought Cacola, it had cash over its price.

Now, it is losing money, and about half of the price I got it. So I figure I probably need to be even more careful if I don't wish to lose money.


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