Unskilled and Unaware of It

CFA General
#1

Thought this was interesting, seems to have a link to overconfidence bias. Opening quote: It is one of the essential features of incompetence that the person so afflicted is incapable of knowing he is incompetent. To have such knowledge would already be to remedy a good portion of the offense. http://www.wepapers.com/Papers/70939/Unskilled_and_Unaware_of_It_-_How_Difficulties_in_Recognizing_One's_Own_Incompetence_Lead_to_Inflated_Self-Assessments

#2

I think this is covered in the behavioural finance section of CFA. 68% of people think they are better than average drivers…haha. Overconfidence is a huge behavioural bias from my observations of people that actively trade.

#3

please don’t send to my manager thanks

#4

Humor tests should be used more often.

#5

http://en.wikipedia.org/wiki/Dunning–Kruger_effect … has been discussed here before I think.

#6

Just read this in L3 - interesting stuff (and I’m still a better driver than you and everybody else).

#7

jcole21 Wrote: ------------------------------------------------------- > Just read this in L3 - interesting stuff (and I’m > still a better driver than you and everybody > else). care to bet on it? http://www.drivepetty.com/

#8

I think it is far better to be so stupid that you don’t know you are stupid than to be just smart enough to realize that you’re not very smart.

#9

I’m very good looking. Probably in the 90% percentile of people.

#10

ohai Wrote: ------------------------------------------------------- > I’m very good looking. Probably in the 90% > percentile of people. Do you do a particularly good job looking at specific things, or are you unusually skilled in looking at everything?

#11

I thought I was unskilled and was unaware of it until I passed Level 1. After passing Level 1 greater than 90% in every section, I am now skilled and aware of it.

#12

This is one of the things that is great about skill games: a clear winner and loser. If you suck at tennis or snowboarding you are going to be aware of it because you will lose the game and bruise your a$$, respectively. This is also the problem with markets: the skill to luck ratio is very low. In investing, I think many are unskilled and unaware of it. That is why being humble is such a big part of being a truly skilled investor. If you know what you do not/can not know, you have an advantage long term.