Alpha Trader by Brent Donnelly

Author:Brent Donnelly
Language: eng
Format: epub
Publisher: Brent Donnelly
Published: 2021-05-11T16:00:00+00:00

That concludes our discussion of counterintuitive math. I hope you found it interesting and fun and I hope that it shakes you up a bit and gets you thinking more actively about your own thinking. If you enjoyed this section, I highly recommend Darrell Huff’s book How to Lie with Statistics. It is a classic that explains in clear language how innocent-looking data and statistics can often be devilishly deceptive.

Be curious. Be open-minded. Seek evidence.

That is the essence of high-quality thinking.

ALWAYS QUESTION COMMON KNOWLEDGE

This is also a useful rule when you run into “common knowledge” in markets. Don’t just listen to pundits and take their word or accept their forecasts at face value. Quite often, even Wall Street professionals on Bloomberg or CNBC will spout non-truths as if they were fact. Be on the lookout for statements that are presented as fact but could be totally false.

When you hear forecasts, no matter how smart the person sounds, assume they are probably pretty random. Analyze declarations, verify them with data and come to your own conclusions.

Here are some examples of questionable “common knowledge” that you hear in markets all the time.

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