Part 6: Learn or How the heck do I ensure I reach Financial Freedom come what may?
6.3 Learn Productive Investing Behaviour No.2
In the age of Information there is no paucity of data, information, content, opinions, research papers etc. If you don’t know what to consume and how to consume information, you will be overwhelmed by it. But you cannot thrive without it either. What you need is a more effective habit.
Are you someone who thinks you need to be on top of things, have all the information before you take decisions? And do you believe that the more information we have, the better our decisions. Seems irrefutable? But, what proof do you have to support this theory?
A study was conducted to separate facts from fiction. Read this very carefully:
Eight experienced bookmakers (bookies) were shown a list of 88 parameters available about a racehorse and its past performance (like number of previous wins, performance in different situations etc.) and asked to rank them in the order of importance.
The bookmakers were then given the data of 45 past races, and asked to rank the top 5 horses in each race considering these parameters. But, the information to each bookmaker was given in various doses of 5, 10, 20 & 40 parameters. Thus, each bookmaker predicted the outcome of each race 4 times – first using the top 5 parameters (as ranked by him), then with 10 and so on. The bookmakers were also asked to give a confidence rating for each of their decisions.
So, what were the findings? The bookmakers were as accurate with 5 pieces of information as they were with 40 pieces of information, i.e. the accuracy of prediction did not rise with increasing information!
And, the most revealing finding of the study was that while their accuracy did not increase, the bookmaker’s confidence about their prediction increased almost two-fold! It...........Read More
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