Thanks to Idfc Mutual Fund Rolf Dobelli, the author of the Million-Copy bestseller was in Mumbai on 13 Jan, 2017 for an one hour talk on ‘The Art of Thinking Clearly’.

Of course he spoke clearly about 8 of the 100 biases that he has written about in his book. Needless to say he spoke well – and covered Outcome bias, overconfidence, sunk cost fallacy, social proof, Chauffeur knowledge, base rate neglect, ‘because’ justification, and Effort Justification.

I have myself written about some of these in earlier posts, so obviously I will not be writing about these concepts. I got an autographed copy of the book, so my trip was worth the cacophony of Mumbai’s awful traffic – that too just from Cotton Green station to Upper Worli – Four Seasons!

Met some interesting people of course, but not naming them – do not remember them all.

Overall Rolf of course spoke well and the people introducing him did not hog the mike and make the whole thing boring. This is an awesome book – and one cannot do a book review of such a book because as a review I will have to list all the 100 biases mentioned, and that will almost mean reproducing the whole book. I would recommend a few books on behavioral finance – including late Parag Parikh’s book apart from Rolf’s book. Rolf’s examples were good and when examples are given well, one appreciates the aptness of the example. For e.g the story of Max Planck, a Nobel winner on his talk tour is an example given of many famous people. I have heard that story about the famous heart surgeon Dr. Christian Bernard also.

I have been noticing this in more recent times. Many people, for example, buy shares of say Gillette or Colgate or Asian Paints saying “Peter Lynch” said buy shares of companies whose products you use. Great, but did Peter Lynch say this? Well as a fund manager he had a big research team. As a fund manager what he meant OBVIOUSLY was “when you see the shares of a company whose product you and your friends use, PLEASE DO EQUITY RESEARCH into that. You cannot buy blindly just because somebody said something 20 years ago, in a different country!

Similarly on subjects like asset allocation, portfolio construction, etc. too many people are already talking – on TV it is sheer cacophony, is it not?

I had one TV editor telling me “in your times you got shares like Colgate so cheap – ACTUALLY we did not get it cheap. These shares were NEVER cheap. We had patience to hold it from 1977 till date – and hence rewarded handsomely.

So when you see people talking about Markets, investor behavior, etc. see the depth. If what you see feels like ‘chauffeur knowledge’ ask a few tough questions…and you will find ‘page not found’ or ‘out of syllabus’.