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Don't override a model #shorts
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When things get tough, humanOS kicks in and tries to override the plan. How should you respond? Clifford Asness: “We try very hard not to make a change to a model in response to a bad period.” Jim (earlier):“I am proudest of the fact that I never overrode a model.” Catch the full episode here: https://youtu.be/WO1oNUchgJE
Segments Timeline
Resisting the Urge to Override
Clifford Asness emphasizes the importance of not changing a model in response to short-term setbacks. He discusses the necessity of imposing waiting periods to ensure decisions are not made in the heat of the moment, highlighting the risks associated with emotional trading and the potential pitfalls of reacting to pain.
"we try very hard not to make a change to a model in response to a bad period bingo I have literally imposed waiting periods so have I if three six months from now you still think this is the right thi..."
The Wiring of Human Decision-Making
Asness reflects on the inherent wiring of humans to react impulsively during tough times. He suggests that if we could understand and reverse this instinctual response, it could lead to better decision-making in trading and investing, ultimately improving outcomes during challenging periods.
"you're in a lot of pain those are about the only negative five sharp ratio strategies aside from overcharging or over trading that I've ever seen I'm fairly convinced we're all wired to somehow if you..."