The Knowledge Project with Shane Parrish #119 Todd Simkin: Making Better Decisions
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Sep 7, 2021 
Todd Simkin, Associate Director at Susquehanna International Group, shares his wealth of experience in financial services and trader education. He discusses the intricate decision-making process, focusing on the differences between financial and interpersonal choices. Simkin stresses the importance of asking the right questions and fostering critical thinking. He also highlights how mentorship and feedback shape decision-making, and shares personal stories, including a transformative conversation with his father on the impact of thoughtful choices.
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Bayesian Thinking in Trading
- Use Bayes' theorem to update probabilities with new information, like a stock's price.
- Consider how much to weigh new information against prior assumptions to determine fair value.
Impact of Cognitive Biases
- Cognitive biases like confirmation bias and hindsight bias hinder our ability to update our beliefs.
- Having second-order knowledge (knowing what you don't know) helps weigh information accurately.
Tribalism and Information Rejection
- Todd Simkin's daughter rejected a quote due to its author's political affiliation.
- This highlights how tribalism affects information processing, dismissing opposing viewpoints.