What do you need to make better decisions?
Don’t pay for more information. Markets are obsessed with it, but as technology has improved it has become far harder to get an edge with the same information available to everyone else. And using nonpublic information is legally risky.
In fact, the research evidence is that beyond a minimal threshold, more information does not help make better decisions. It produces more overconfidence, not more accuracy.
That is why Aluicdate is not journalism or a data service. We are not looking for an entertaining story, or scoops, or nonpublic information. Instead, the most important requirement for investors is working out which information matters. And the major obstacle to that is the frames and assumptions and blindspots. That is what we specialize in identifying and resolving.
Don’t pay for more economic forecasts or expert opinions. There are few signs that expert economic and political predictions are any better than “dilettantes, dart-throwing chimps and assorted extrapolation algorithms”, according to another major study of actual outcomes.
In fact, the evidence is those who can’t resist paying for expert opinions are suckers: “only suckers pay for seers.” Economists in particular are often trained in a rational-actor approach that intentionally ignores assumptions, perceptions and learning.
That is why Alucidate is not based on economic theory or forecasting. Instead, we look at what goes wrong when expertise and theory is used in the decision process. We look at people’s mindset: what they pay attention to, and why. The value of expertise is in what people notice. Alucidate focuses on how and why people notice different things, and what they leave out.
Subject experts also often find it hard to adapt to new evidence and new views. So we look at how people test and assimilate (or resist) new evidence, and change their minds. The one hope for improving expert performance, according to the same research, is “to make an active search for disconfirming evidence.” That is the core of Alucidate’s approach.
Don’t pay for more elaborate models. The crisis of 2008 humiliated many quant funds and risk managers. Regulators condemn “black box” models with doubtful assumptions which senior decision-makers don’t understand.
In fact, the most brilliant and able quants know the limits of quantitative techniques, and stress the need to think through the assumptions and context. Their less able colleagues just look at the “robustness” of models by altering some of the variables.
That is why Alucidate is not based on quantitative technique, but it is an essential complement to using models. We specialize in identifying hidden assumptions, especially by comparing different viewpoints.
Alucidate helps you make better decisions by finding the blindspots.Read more about our experience.