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Alphabrain: How a Group of Iconoclasts Are Using Cognitive Science to Advance the Business of Alpha Generation

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Smarter decision-making based on cognitive science AlphaBrain is the investor's guide to achieving more, doing better, and reaching higher. At its core, the magnitude of your success is based on the quality of your decisions. The problem is that human beings are poor decision-makers; we tend to approach problems after they arise instead of planning for them in advance. We p Smarter decision-making based on cognitive science AlphaBrain is the investor's guide to achieving more, doing better, and reaching higher. At its core, the magnitude of your success is based on the quality of your decisions. The problem is that human beings are poor decision-makers; we tend to approach problems after they arise instead of planning for them in advance. We put too much weight on instinct, belief, and gut feeling. We make the same mistakes over and over again--so reliably, in fact, that cognitive science can accurately predict exactly which mistakes we'll make and when. This book offers a way to understand and plan for the human mind's usual tendencies to help you make smarter investment decisions. Using a framework based on cognitive research, you'll learn how to approach decisions objectively, systematically, and constantly review your process; you'll take action based on evidence instead of intuition, and get ahead of potential problems before they get the best of you. With so much riding on the correctness of your choices, natural tendency can be a dangerous thing. This book shows you how to remove the bias and emotion to start making choices backed by hard evidence and objective data and lower your stress. Shift your processes from reactive to proactive Base decisions on reality over belief Eliminate cognitive bias and reduce common mistakes Make better decisions with a systematic, objective approach Why do we begin managing risk only once it becomes apparent? Why do we react to the market instead of making the big decisions before emotion takes over? Investing has always been a largely reactive field, but those who dominate it approach decision-making less like a human and more like a machine. AlphaBrain shows you how to get real about investing, with cognitive techniques that lead to smarter, evidence-based decisions.


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Smarter decision-making based on cognitive science AlphaBrain is the investor's guide to achieving more, doing better, and reaching higher. At its core, the magnitude of your success is based on the quality of your decisions. The problem is that human beings are poor decision-makers; we tend to approach problems after they arise instead of planning for them in advance. We p Smarter decision-making based on cognitive science AlphaBrain is the investor's guide to achieving more, doing better, and reaching higher. At its core, the magnitude of your success is based on the quality of your decisions. The problem is that human beings are poor decision-makers; we tend to approach problems after they arise instead of planning for them in advance. We put too much weight on instinct, belief, and gut feeling. We make the same mistakes over and over again--so reliably, in fact, that cognitive science can accurately predict exactly which mistakes we'll make and when. This book offers a way to understand and plan for the human mind's usual tendencies to help you make smarter investment decisions. Using a framework based on cognitive research, you'll learn how to approach decisions objectively, systematically, and constantly review your process; you'll take action based on evidence instead of intuition, and get ahead of potential problems before they get the best of you. With so much riding on the correctness of your choices, natural tendency can be a dangerous thing. This book shows you how to remove the bias and emotion to start making choices backed by hard evidence and objective data and lower your stress. Shift your processes from reactive to proactive Base decisions on reality over belief Eliminate cognitive bias and reduce common mistakes Make better decisions with a systematic, objective approach Why do we begin managing risk only once it becomes apparent? Why do we react to the market instead of making the big decisions before emotion takes over? Investing has always been a largely reactive field, but those who dominate it approach decision-making less like a human and more like a machine. AlphaBrain shows you how to get real about investing, with cognitive techniques that lead to smarter, evidence-based decisions.

30 review for Alphabrain: How a Group of Iconoclasts Are Using Cognitive Science to Advance the Business of Alpha Generation

  1. 5 out of 5

    Bryan

    I was disappointed that this book didn’t spend more time laying out a process for making more effective decisions and avoiding cognitive bias traps. In the first half of the book, I was teased with ideas like getting disproportional benefits from marginal improvements and thinking of decisions in a new way; unfortunately the book did little to build on these concepts and put them into a usable form. The first half of the book is like talking to a friend who tantalizes you with exciting-sounding I was disappointed that this book didn’t spend more time laying out a process for making more effective decisions and avoiding cognitive bias traps. In the first half of the book, I was teased with ideas like getting disproportional benefits from marginal improvements and thinking of decisions in a new way; unfortunately the book did little to build on these concepts and put them into a usable form. The first half of the book is like talking to a friend who tantalizes you with exciting-sounding ideas flying out of his mouth a mile a minute, but without any follow-through and little explanation of what’s really going on in your friend’s head. The second half of the book reads more like a first stab at translating notes from a personal trading journal into a collection of themes than completed chapters. I understand that Stephen suffered a severe stroke before the book was published, and perhaps this contributed to the book’s largely unfinished feel. It was also unclear what the target audience for the book is: lay persons looking to learn more about how to avoid errors in thinking and thereby improve one’s performance, or full-time investment professionals who spend their days fluently tossing around Greek terms like alpha, beta, vega, etc. The second half of the book especially was too “inside baseball” for me. Here’s a fairly typical sentence from the second half of the book: “When I entered a trade in US Dollar versus Japanese Yen on January 15, 2016, one of the Reassessment Triggers stated that if USD/JPY were to trade up to 120.00, I would double the capital at risk on the trade through the addition of another one-year 10 delta USD put JPY call.” If this speaks to you, then you’ll love this book. But if this strikes you as dense and generally unhelpful, then you’ll likely be very underwhelmed by the second half of the book. I do highly recommend Stephen’s TED talk on goal setting, which is available online (and one of the best TED talks I've watched), and I wish Stephen the best as he continues to recover. For those looking for an enjoyable discussion of cognitive biases in a format that over-delivers for its weight, I’d recommend Annie Duke’s “Thinking in Bets.”

  2. 5 out of 5

    Chetan Vashisht

    Right off the bat, this book is not for everyone. It's pretty expensive. The book is divided into two parts. The first part is about decision making and how making good decisions over time compounded can yield some amazing results. The second half of the book is about applying these principles to a financial profile (as a hedge fund manager). I only read half the book, because the second half makes no sense without the adequate knowledge. Having said that, the first half of the book contains some Right off the bat, this book is not for everyone. It's pretty expensive. The book is divided into two parts. The first part is about decision making and how making good decisions over time compounded can yield some amazing results. The second half of the book is about applying these principles to a financial profile (as a hedge fund manager). I only read half the book, because the second half makes no sense without the adequate knowledge. Having said that, the first half of the book contains some valuable advice on making good decisions and the importance of consistently making such decisions. The second thing he speaks about is not making or avoiding mistakes whenever possible. He also says that one must check the decisions made by hedge fund managers before investing in their funds rather than looking at their past returns. Because the person who more consistently makes better decisions is bound to be more successful long term.

  3. 4 out of 5

    Aldwin Susantio

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  4. 4 out of 5

    Jan Ko

    Great book for describing how to setup rational decision making process. How to avoid noise, Eliminate cognitive bias and reduce common mistakes in decisions. Shift your processes from reactive to proactive Base decisions on reality over belief Eliminate cognitive bias and reduce common mistakes Make better decisions with a systematic, objective approach Read already twice, definitely worth to re-read again.

  5. 4 out of 5

    Prashob

    Read it halfway through doesn't seem to be useful for me, the target audience isn't well defined, too much noise and less meat more suited for people from a financial background if you are io n search for decision making books go for Daniel Kahneman, Dan Areily , Chip Heath etc Read it halfway through doesn't seem to be useful for me, the target audience isn't well defined, too much noise and less meat more suited for people from a financial background if you are io n search for decision making books go for Daniel Kahneman, Dan Areily , Chip Heath etc

  6. 5 out of 5

    Edgar

    It’s a mixed up book,one doesn’t really know the target audience until they have started and are halfway inside to realize it’s an investment strategy book. But traders will enjoy it

  7. 5 out of 5

    Chris Esposo

    This book has a very simple theme: Subconscious cognitive bias impacts your discretionary investment decisions and could lead to (likely catastrophic) errors in any number of investment decisions (entering/exiting/allocations etc.), but given that the book is primarily being targeted at professional fund managers, mostly focused on the last one, allocations. There are two things I can say about the book: 1. The content is good/substantive 2. The content is very similar to a lot of other material This book has a very simple theme: Subconscious cognitive bias impacts your discretionary investment decisions and could lead to (likely catastrophic) errors in any number of investment decisions (entering/exiting/allocations etc.), but given that the book is primarily being targeted at professional fund managers, mostly focused on the last one, allocations. There are two things I can say about the book: 1. The content is good/substantive 2. The content is very similar to a lot of other material This later issue is what makes the book a bit of a let-down for me, or anyone who’s read a handful of books either on creating a personal trading/investment system (e.g. “High Probability Trading”) to manage risk and mitigate discretionary actions within decision-making, or general pop-sci behavior economics (or behavioral sciences/self-help hybrid books), in that much of the stories/anecdotes and advice provided here I’ve read before (multiple times). So in effect, there’s not “much new under the sun” in this text. This again, is not to say the information is bad, it is definitely not. It’s very sound, very well written, and often substantiated by either well-thought out investment analysis/strategy or some kind of published behavioral science. Further, not all is the text was redundant for me, the last 4 chapters is really where the unique (and relevant) content starts, and I will definitely read those again to make sure I’ve groked what the author intended. If the entire book was more like the last 4 chapters, this would be a 4 or 5 star text no doubt. As I'm not sure who would find this book truly suitable, it is intended for fund managers. Yet, I would think that readership would agree with me in saying that at least half the text is trivial/redundant (fund managers in general tend to be well read so I can’t believe any of the material found in those chapters would be novel to them). It’s too specialized for a newbie personal investor, though someone coming into investing could benefit from reading the book, it’s just for them, the last 4 chapters won’t make much sense on account of the lack of actual trading experience to contextualize the advice given in those pages. I think this is a conditional recommendation for those who have some trading experience, but have not been well read in the investment field and needs a guide stone to those ideas.

  8. 5 out of 5

    MR Riccardo

  9. 4 out of 5

    Allen

  10. 5 out of 5

    Heath

  11. 5 out of 5

    Richard

  12. 4 out of 5

    Scott Gillespie

  13. 5 out of 5

    Radoslav

  14. 5 out of 5

    Henry Yu

  15. 4 out of 5

    Ashutosh Singh

  16. 4 out of 5

    TΞΞL❍CK Mith!lesh

  17. 5 out of 5

    Shane Moore

  18. 5 out of 5

    Rafael Abreu

  19. 4 out of 5

    iamclem

  20. 5 out of 5

    Cat Rulo

  21. 4 out of 5

    Manuel Ayllon

  22. 5 out of 5

    Luiz Beatrice

  23. 5 out of 5

    Deyan

  24. 4 out of 5

    Bruno Dias

  25. 5 out of 5

    Alex A.

  26. 4 out of 5

    Sarah

  27. 5 out of 5

    Jelmer

  28. 5 out of 5

    Kellie Gallivan

  29. 5 out of 5

    Rajesh

  30. 5 out of 5

    Andrzej Stempien

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