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What you do is look at the rationale that was given before it happened. You look at their reasoning and figure out if it was actually what happened in reality.

What you do is look at the rationale that was given before it happened. You look at their reasoning and figure out if it was actually what happened in reality. Just make sure you are not picking up on their rationalisation after the fact.

KptMarchewa 4y ago
The fact that they had good reasoning in the past does not guarantee they will continue in the future.
- twawaaay 4y ago
  You are right, but it is not very useful way of looking at the world. Sometimes you just need to trust people on certain things to be able to make useful decisions having very little or no knowledge in the subject. One useful way of dealing with this is to look at the past performance of the person. Assuming you have no other information about the market, if you see a person having track record of well-reasoned, accurate market predictions it is probably as good signal as it gets that you should trust their predictions. Ideally you would want to check this with other people having knowledge in the topic (and also good track record), check that their knowledge is still applicable to circumstances (if they were able to give good predictions in peace maybe they are not suited to doing this in the time of war) and hopefully also educate yourself just a bit to be able to ask clarifying questions and spot obvious problems.
  - thingification 4y ago
    So who has done well on this score in your book? :-)
  - xdavidliu 4y ago
    “well reasoned” is often easily faked, and often confused with “articulate”
danielmarkbruce 4y ago
The rationalizations before they happened are always very intelligent sounding, even in retrospect. If you have 100 intelligent sounding speculators lay out their reasoning and one hits the jackpot, it doesn't mean much. The general problem is each has a mental (or computer) model of the world that is a vast simplification of the world. When they get it right it sounds like they understood and accounted for all the variables. They never did.
- twawaaay 4y ago
  You are not looking if they "sounded" intelligent. You are looking if they were true.
  - danielmarkbruce 4y ago
    If I flip a coin and someone has an intelligent sounding reason for it to come up heads... and then it does... it means practically zero. Being right means little when there are 100s of folks with predictions and reasons.
  - xdavidliu 4y ago
    if someone made a correct prediction on a coinflip, you’re more likely to believe they knew what they were doing (rather than just get lucky) if they sound intelligent

KptMarchewa 4y ago

The fact that they had good reasoning in the past does not guarantee they will continue in the future.

twawaaay 4y ago
You are right, but it is not very useful way of looking at the world. Sometimes you just need to trust people on certain things to be able to make useful decisions having very little or no knowledge in the subject. One useful way of dealing with this is to look at the past performance of the person. Assuming you have no other information about the market, if you see a person having track record of well-reasoned, accurate market predictions it is probably as good signal as it gets that you should trust their predictions. Ideally you would want to check this with other people having knowledge in the topic (and also good track record), check that their knowledge is still applicable to circumstances (if they were able to give good predictions in peace maybe they are not suited to doing this in the time of war) and hopefully also educate yourself just a bit to be able to ask clarifying questions and spot obvious problems.
- thingification 4y ago
  So who has done well on this score in your book? :-)
- xdavidliu 4y ago
  “well reasoned” is often easily faked, and often confused with “articulate”

danielmarkbruce 4y ago

The rationalizations before they happened are always very intelligent sounding, even in retrospect. If you have 100 intelligent sounding speculators lay out their reasoning and one hits the jackpot, it doesn't mean much. The general problem is each has a mental (or computer) model of the world that is a vast simplification of the world. When they get it right it sounds like they understood and accounted for all the variables. They never did.

twawaaay 4y ago
You are not looking if they "sounded" intelligent. You are looking if they were true.
- danielmarkbruce 4y ago
  If I flip a coin and someone has an intelligent sounding reason for it to come up heads... and then it does... it means practically zero. Being right means little when there are 100s of folks with predictions and reasons.
- xdavidliu 4y ago
  if someone made a correct prediction on a coinflip, you’re more likely to believe they knew what they were doing (rather than just get lucky) if they sound intelligent