Should You Slap A Simple Single Or Swing For The Fences?

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Photo by Ulrik on Freeimages.com

This could easily become a column on successful investing, but it’s not. It does, however, reflect a Noble Prize-winning concept that has propelled successful investors for more than half a century. It’s simple. I’ll explain it quickly.

Every investment option possesses two critical factors: risk and return. Scholars credit economist Harry Markowitz as the first to identify the correlation of risk and return. In his 1952 paper “Portfolio Selection,” Markowitz, the father of “Modern Portfolio Theory,” says low-risk investments can yield low returns and high-risk investments must yield high returns. The “can” and “must” refer to the price you should reasonably pay for the investment.

But this column isn’t about successful investing, it’s about life. Specifically, your life. More precisely, the choices you face in your life. Understanding the dichotomy between “low-Continue Reading “Should You Slap A Simple Single Or Swing For The Fences?”

Are You a Laurel or a Yanni?

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A few days before it went viral, Peter asked Betsy and me to listen to something and tell him what we heard. This was the now famous “Laurel/Yanni” audio illusion.

An audio illusion is like an optical illusion. You use your eyes with optical illusions and your ears with audio illusions. With optical illusions, the same drawing reveals two completely different pictures. What you see depends entirely on what you’re looking for. In an identical way, an audio illusion contains one string of sounds. You hear what you want (or expect) to hear.

In the case of the Laurel/Yanni audio illusion, listeners convince themselves the string of sounds says “Laurel” or “Yanni.” Although the sound is the same, different people hear different things. Some people (like Peter) can hear either one, depending on what they’re listening for.

And therein lies the critical lesson of this latest internet sensation, the audio version of the Continue Reading “Are You a Laurel or a Yanni?”

How to Convince Everyone You’re Really Smart (Without Actually Doing Anything Really Smart)

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Confirmation bias is a terrible thing to waste. So don’t.

If you’re the least bit curious about what I just said, then this column is written just for you.

Dilbert creator Scott Adams’ recent book Win Bigly defines confirmation bias as “the human tendency to see all evidence as supporting your beliefs, even if the evidence is nothing more than coincidence.”

Have you heard the expression “First impressions are lasting impressions?” A simple explanation shows the truth of this adage. It goes like this:Continue Reading “How to Convince Everyone You’re Really Smart (Without Actually Doing Anything Really Smart)”

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