{"id":33944,"date":"2013-11-17T10:23:15","date_gmt":"2013-11-17T15:23:15","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=33944"},"modified":"2023-04-27T08:44:59","modified_gmt":"2023-04-27T12:44:59","slug":"enhancing-our-performance-with-michael-mauboussin","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/enhancing-our-performance-with-michael-mauboussin","title":{"rendered":"Enhancing Our Performance with Michael Mauboussin"},"content":{"rendered":"

*****David Blair, The Crosshairs Trader, is a blogger\/trader\/educator who does a wonderful job of sharing research on elite performance and how it relates to trading. Below is his latest post for the SMB Trading Community. We hope you enjoy!***** \u2014 Editor\u2019s Note<\/p>\n

Let\u2019s face it, when it comes to managing risk in an environment of uncertainty (e.g., the stock market) we\u00a0can all\u00a0benefit by learning from the experiences of others. It was the famous mathematician and physicist Sir Isaac Newton who said \u201cif I have seen further it is by standing on the shoulders of giants.\u201d Newton was not referring to his physical stature here but to his deep appreciation for those who helped him see the world more clearly. Is it not the same for those who navigate the uncertainty of the markets? Our\u00a0quest to understand\u00a0and interpret\u00a0market structure is certainly enhanced from the technical\u00a0studies of those who came before us. But more importantly, our trading can be enhanced with a deeper appreciation of how we make decisions and the factors that play important roles in our decision making. Michael Mauboussin<\/a>, managing director and head of global finance strategies at Credit Suisse, has provided a wealth of informative studies on how to make better decisions, specifically where luck is a major factor, such as we find when trading. Let\u2019s stand on the shoulders of Mr. Mauboussin and learn something, shall we?<\/p>\n

\u201cI like to think of markets as complex adaptive systems.\u201d (an interview via Seeking Alpha<\/a>)<\/p>\n

\u201cWhat if I told you that in many cases improving skill leads to results that rely more on luck? That\u2019s right. Greater skill doesn\u2019t decrease the dependence on luck, it increases it. If you have an interest in sports, business, or investing, this lesson is for you.\u201d (The Paradox of Skill<\/a>)<\/p>\n

\u201cOutcomes from many activities\u2014including sports, business, and investing\u2014are the combination of skill and luck. Most people recognize that skill and luck play a role in results, yet they have a poor sense of the relative contribution of each. The ability to properly untangle skill and luck leads to much better thinking about most day-to-day outcomes, and allows for sharply improved decision making.\u201d (Untangling Skill and Luck<\/a>)<\/p>\n

\u201cThe combination of differential capabilities and existence of superior performers provides a basis for judging skill versus luck. Individuals who consistently succeed in various probabilistic fields possess both superior skills and a dissimilar approach to others. In fact, these super performers appear to have more in common with one another than they do with the average participant in their own field. A great investor thinks more like a great handicapper than the average investor.\u201d (Decision-Making For Investors)<\/p>\n

\u201cChances are you’re unaware of the limits to your abilities, unappreciative of the challenges that lie ahead, and uninformed of all that can go wrong.\u201d (Smart People, Dumb Decisions)<\/p>\n

An explanation of\u00a0how split-brain experiments help us\u00a0understand why we have a hard time\u00a0understanding\u00a0randomness and luck. (VIDEO: Why We Don\u2019t Understand Luck)<\/p>\n

Books for further enhancement:<\/p>\n

The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing<\/a> <\/em><\/p>\n

More Than You Know: Finding Financial Wisdom in Unconventional Places<\/a><\/em><\/p>\n

Think Twice: Harnessing the Power of Counterintuition<\/a><\/em><\/p>\n

David Blair<\/b><\/p>\n

THE CROSSHAIRS TRADER<\/b><\/p>\n

Related blog posts:
\nThe Eight Principles of Elite Traders<\/a>
\nEnhancing Performance With Bias Awareness<\/a><\/p>\n

No relevant positions<\/p>\n","protected":false},"excerpt":{"rendered":"

*****David Blair, The Crosshairs Trader, is a blogger\/trader\/educator who does a wonderful job of sharing research on elite performance and how it relates to trading. Below is his latest post for the SMB Trading Community. We hope you enjoy!***** \u2014 Editor\u2019s Note Let\u2019s face it, when it comes to managing risk in an environment of uncertainty (e.g., the stock market) … Read More<\/a><\/p>\n","protected":false},"author":1042,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1935,1,455],"tags":[3562,3563,3469,3564,691,1332,38],"class_list":["post-33944","post","type-post","status-publish","format-standard","hentry","category-david-blair","category-general-comments-2","category-trading_psychology","tag-bia-awareness","tag-decision-making","tag-enhancing-performance","tag-improving-skills","tag-luck","tag-technical-analysis","tag-trading","no-post-thumbnail"],"yoast_head":"\nEnhancing Our Performance with Michael Mauboussin | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/enhancing-our-performance-with-michael-mauboussin\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Enhancing Our Performance with Michael Mauboussin | SMB Training\" \/>\n<meta property=\"og:description\" content=\"*****David Blair, The Crosshairs Trader, is a blogger\/trader\/educator who does a wonderful job of sharing research on elite performance and how it relates to trading. 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