Thinking, Fast and Slow - Daniel Kahneman

Rachlinski, “A Positive Psychological Theory of Judging in Hindsight,” University of Chicago
Law Review 65 (1998): 571–625.
tidbit of intelligence: Jeffrey Goldberg, “Letter from Washington: Woodward vs. Tenet,” New
Yorker, May 21, 2007, 35–38. Also Tim Weiner, Legacy of Ashes: The History of the CIA
(New York: Doubleday, 2007); “Espionage: Inventing the Dots,” Economist, November 3,
2007, 100.
reluctance to take risks: Philip E. Tetlock, “Accountability: The Neglected Social Context of
Judgment and Choice,” Research in Organizational Behavior 7 (1985): 297–332.
before their current appointment: Marianne Bertrand and Antoinette Schoar, “Managing with
Style: The Effect of Managers on Firm Policies,” Quarterly Journal of Economics 118 (2003):
1169–1208. Nick Bloom and John Van Reenen, “Measuring and Explaining Management
Practices Across Firms and Countries,” Quarterly Journal of Economics 122 (2007): 1351–
1408.
“How often will you find…”: I am indebted to Professor James H. Steiger of Vanderbilt
University, who developed an algorithm that answers this question, under plausible
assumptions. Steiger’s analysis shows that correlations of .20 and .40 are associated,
respectively, with inversion rates of 43% and 37%.
his penetrating book: The Halo Effect was praised as one of the best business books of the year
by both the Financial Times and The Wall Street Journal: Phil Rosenzweig, The Halo
Effect:…and the Eight Other Business Delusions That Deceive Managers (New York: Simon
& Schuster, 2007). See also Paul Olk and Phil Rosenzweig, “The Halo Effect and the
Challenge of Management Inquiry: A Dialog Between Phil Rosenzweig and Paul Olk,”
Journal of Management Inquiry 19 (2010): 48–54.
“a visionary company”: James C. Collins and Jerry I. Porras, Built to Last: Successful Habits
of Visionary Companies (New York: Harper, 2002).
flip of a coin: In fact, even if you were the CEO yourself, your forecasts would not be
impressively reliable; the extensive research on insider trading shows that executives do beat
the market when they trade their own stock, but the margin of their outperformance is barely
enough to cover the costs of trading. See H. Nejat Seyhun, “The Information Content of
Aggregate Insider Trading,” Journal of Business 61 (1988): 1–24; Josef Lakonishok and
Inmoo Lee, “Are Insider Trades Informative?” Review of Financial Studies 14 (2001): 79–111;
Zahid Iqbal and Shekar Shetty, “An Investigation of Causality Between Insider Transactions
and Stock Returns,” Quarterly Review of Economics and Finance 42 (2002): 41–57.
In Search of Excellence: Rosenz {lenlatweig, The Halo Effect.
“Most Admired Companies”: Deniz Anginer, Kenneth L. Fisher, and Meir Statman, “Stocks of
Admired Companies and Despised Ones,” working paper, 2007.
regression to the mean: Jason Zweig observes that the lack of appreciation for regression has
detrimental implications for the recruitment of CEOs. Struggling firms tend to turn to