Wisdom Is Better Than
Knowledge
don't be misled by an
educated fool
An economist and a financial analyst
came to a horse handicapper and said they had found a
perfect way to predict winners in horse races.
The gambler became excited; no more reading
stats, comparing jockeys, watching the weather, etc. In
other words winning would no longer be hard work and managing
risk.
The bookie took the professors off to
the side and asked for a hint to the process. The economist
said " well, first we assume the horses are all ellipses."
Far too often we hear of dignified professionals
that have gone broke - and taken others with them.
They have blindly followed their mathematical
models down supposedly safe streets - and fallen into
a sink hole. Their econometric machinations had assured
them the hole could not exist in this century.
The trouble was the sink hole didn't
know that.
Look around you. How many natural shapes do you see that
fit Euclidean Geometry?
There is a reason we have the phrase, organic shapes.
Math must force life into unnatural shapes to emulate
life. Unfortunately the results, while solid and comforting,
have absolutely no resemblance to reality.
Economists generally use linear or curvilinear models
to predict. Mathematics is great at straight lines, life
is great at dangerous and surprising curves and drops.
Once life is smoothed to eliminate outliers, the outliers
will always be a surprise. If you are to succeed - you
must protect yourself.
Learn to manage your own money.
No one cares more about your money than
you do - unless they plan to use your money to enrich
themselves .
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