MICHAEL Mauboussin, MD and head of global financial strategies at Credit Suisse, joined Bloomberg columnist Barry Ritholtz for a discussion on Bloomberg Radio in August.Both have a reputation for being especially good at linking diverse ideas to investing.Among the things they discussed was:The inside-outside view:Ritholtz: In your book Think Twice you use the phrase counterintuition. What is it?Mauboussin: The big idea in Think Twice is that when we’re faced with a big decision, our minds tend to think about the problem one way, when there may be a better way to think about it. Counterintuition is the process of checking ourselves by asking, is there a way I can think about this more effectively?Let me give you an example provided by Daniel Kahneman, who calls it the inside-outside view: you’re remodelling your kitchen, you want to know what it will cost, how long it will take etc. The classic approach is to gather tons of information and project into the future. The outside view, ...
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