Been Reading

My ordered books from Amazon have arrived two weeks ago. Currently, I am spending my time reading on “The Three Questions that count” by Kenneth Fisher and “The Black Swan” by Nassim Taleb.

“The Three Questions that count”, as described by Fisher, are three questions that can be used to answer one question.”What is it, that you know and others do not know, which gives you the advantage over others in the market?” The book is thick but worth the time reading. I have not finished the book. However, I can give you the three questions here. You will learn much more by reading the book to know how these three questions can be applied. For more details, you can refer to www.onlythreequestions.com/ or the Jan –Feb articles in http://www.wallstraits.com/main/index.php

The three questions are:
1) What do you believe that is actually false?
2) What can you fathom that others find unfathomable?
3) What the heck is my brain doing to blindside me now?

The other book “The Black Swan” discuss on the topic of extreme events that are of high impact and low frequency. It is much more philosophical than the author’s first book “Fooled by Randomness” (2nd ed). So far, I have read around half of the book but it seems insufficient to provide a review here. However, I do envy the author having the financial freedom to live by thinking about philosophical stuffs.

Nonetheless, extreme events do deserve our attentions; especially since they do happen in the field of finance. For example, the collapse of LTCM is caused by extreme event(s). For more details on the book or on Nassim’s thoughts on extreme events, you can refer to http://www.fooledbyrandomness.com/. Or for a complete and long review of the book, see http://econophysics.blogspot.com/2007/05/black-swan-well-thats-life.html (too long for me to finish at one go).