knb comments on Extreme Rationality: It's Not That Great - Less Wrong

140 Post author: Yvain 09 April 2009 02:44AM

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Comment author: knb 09 April 2009 04:49:08PM *  5 points [-]

" It pays to be ONE step ahead of the mob, not 10! You cannot make money in the stock market by being 10 steps ahead. You'd be shorting stocks into oblivious in the 90's and 2006-2007, while the mob was getting more and mroe exuberant."

It is NOT rational to think that people are smarter than they are. If you really are better at predicting where stocks are going, factoring other peoples irrationality in is part of the game.