Latest news with #DanielKahneman
Forbes
3 days ago
- Business
- Forbes
Your Mind Can Create Using The Same Process As AI
Woman sketching a business plan on a placard at a creative office Four short months ago, when China launched DeepSeek, its new AI chatbot, the effect on the U.S. stock market was profound. Hardest hit was NVIDIA Corporation, the leading supplier of hardware and software for DeepSeek's entrenched American competitors— OpenAI's ChatGPT, Meta's Llama, and Anthropic's Claude. NVIDIA lost almost $600 billion in market capitalization and its share price plummeted 17%. As this Forbes article reports, DeepSeek also started a price war among its Chinese AI competitors: ByteDance, Tencent, Baidu and Alibaba. What shook up all these constituencies was DeepSeek's revolutionary AI architecture with a secret sauce called Mixture-of-Experts (MoE) a vast simplification from the single giant neural network called Large Language Model (LLM) used by ChatGPT, Llama, and Claude. Both MoE and LLM provide users with the ability to manage access to a huge corpus of digital information. But your mind is capable of doing the same with a huge corpus of human information. With or without AI, whenever you set about to generate, organize, and create information—whether as text or spoken—you must access a huge corpus of information in your brain. So in the spirt of National Creativity Day, this blog will provide you with a very simple four-step process to do that—and to become more effective when you create. Fundamental to all the steps is an understanding of the basic concepts in Nobel Prize winner Daniel Kahneman's bestselling book Thinking, Fast and Slow in which he explains that the human mind functions in two distinct phases. If you start to develop your presentation, report, or email with Slow Thinking factors such as logic, sequence, and word choice (or, for that matter, the color, style, font, and design of your slides) while your Fast Thinking is bubbling up all those random ideas, the whole process descends into disarray. The key then is to allow the Fast Thinking to run its course before attempting to impose a sequence with Slow Thinking. So, control your Fast Thinking with these four steps: Now and only now are you ready to organize and sequence your content. Who needs DeepSeek?
Time of India
4 days ago
- Business
- Time of India
6 essential books every professional should read to decode human behaviour and communicate smarter
In today's fast-paced, high-stakes professional environment, understanding human behaviour is more than a soft skill, it's a strategic asset. Whether you're managing teams, negotiating deals, leading change, or building client relationships, the ability to decode why people act the way they do is key to effective communication and sustained influence. While countless theories have emerged over time, a handful of books stand out for their clarity, depth, and real-world application. The six acclaimed titles listed here offer powerful frameworks to help professionals manage complex interpersonal dynamics with greater insight and effectiveness. Whether your goal is to influence ethically, make sounder decisions, or lead with empathy, these books serve as indispensable guides. 1. Influence: The Psychology of Persuasion – Robert Cialdini Robert Cialdini's Influence introduces six universal principles that drive human decision-making: reciprocity, commitment, social proof, authority, liking, and scarcity. These principles help explain how marketers, leaders, and even cults can shape behaviour. Professionals will learn how to apply these tactics responsibly, while also recognising and defending against unethical persuasion. This book is especially valuable for those in marketing, negotiations, and stakeholder engagement. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Esta nueva alarma con cámara es casi regalada en Lo Prado (ver precio) Verisure Alarmas Leer más Undo 2. Thinking, Fast and Slow – Daniel Kahneman Nobel laureate Daniel Kahneman explores two core modes of thinking in this groundbreaking work: fast, intuitive decision-making and slow, analytical reasoning. Through compelling insights into biases such as confirmation bias and loss aversion, Kahneman helps readers understand how judgment is often flawed, and how to correct it. A must-read for executives, analysts, and decision-makers seeking to improve cognitive clarity and strategic thinking. 3. The Laws of Human Nature – Robert Greene Drawing from psychology, history, and philosophy, Robert Greene examines why people frequently act irrationally and how to respond with emotional intelligence. The Laws of Human Nature offers tools to identify manipulation, manage egos, and convert adversaries into allies. This book is highly relevant for leaders, consultants, and professionals navigating high-stakes or politically sensitive environments. 4. Predictably Irrational – Dan Ariely Behavioural economist Dan Ariely reveals the underlying logic behind seemingly irrational behaviour in areas such as productivity, spending, and decision-making. Predictably Irrational shows how human actions, though often flawed, follow consistent, predictable patterns. Entrepreneurs, economists, product managers, and policy professionals will find valuable, research-driven insights into how people truly think and behave. 5. How to Win Friends and Influence People – Dale Carnegie Dale Carnegie's enduring bestseller remains one of the most influential works on relationship-building. With practical techniques like using people's names, showing genuine interest, and listening actively, How to Win Friends and Influence People helps readers foster trust and rapport, both vital for effective leadership and team dynamics. This book is essential for managers, client-facing professionals, and anyone seeking to strengthen workplace communication. 6. Quiet: The Power of Introverts in a World That Can't Stop Talking – Susan Cain Susan Cain's Quiet challenges the extrovert-centric model of leadership by showcasing the unique strengths introverts bring to organisations. From thoughtful problem-solving to deep focus and creativity, Cain reveals why introverts are key to building balanced, high-performing teams. This book is particularly insightful for team leaders, HR professionals, and introverted professionals looking to leverage their natural strengths. Why These Books Matter Human behaviour is complex, but understanding its drivers is essential for professional success. These six titles offer research-backed, actionable guidance for improving communication, decision-making, leadership, and interpersonal effectiveness. Whether you're leading a team, presenting to stakeholders, or managing client expectations, the insights in these books provide a foundation for stronger performance and more meaningful professional relationships. All six books are readily available through major bookstores and online retailers—making it easier than ever to access powerful tools to better understand and navigate human behaviour in today's evolving workplace. Ready to empower your child for the AI era? Join our program now! Hurry, only a few seats left.
Globe and Mail
19-05-2025
- Business
- Globe and Mail
It could have been worse: Our irrational love of less-bad news.
Sam Sivarajan is a keynote speaker, independent wealth management consultant and author of three books on investing and decision-making. His forthcoming book will explore how to thrive in a world of uncertainty. On May 12, the stock market surged with the S&P 500 jumping more than 1.5 per cent and the Nasdaq rising nearly 2 per cent. The catalyst? News that the United States and China had reached a trade agreement where tariffs on Chinese imports would increase by 'only' 30 per cent. This was a market that, just weeks earlier, had been fretting about the possibility of 60 per cent tariffs, and 145 per cent at the start of the tariff wars. As one market analyst aptly put it to The Globe and Mail, 'what was once a terrifying scenario is now a positive development.' What we witnessed was a textbook example of how markets – and humans more broadly – can transform objectively bad news into seemingly good news, simply because it wasn't as terrible as feared. The 30-per-cent tariff, devastating in any other context, became a cause for celebration. If this sounds irrational, that's because it is. But it's also deeply human. Behavioural economists have a term for this psychological quirk: reference dependence. According to Nobel Prize-winning economist Daniel Kahneman and his colleague Amos Tversky, we don't evaluate outcomes in absolute terms, but rather relative to reference points. In their groundbreaking work on prospect theory, they showed that our perceptions of gains and losses depend heavily on the reference point from which we start. When expectations are sufficiently negative, even objectively poor outcomes can feel like wins. A 2006 study by D.A. Kermer and colleagues found that people consistently overestimate the impact of negative events and underestimate their ability to adapt to them. When the feared negative outcome doesn't fully materialize, the relief creates a positive emotional response that can overshadow rational assessment. We essentially celebrate having dodged a bullet, even if we've still been wounded in the process. This reference dependence combines with several other behavioural biases to create a perfect storm of irrational market responses. Recency bias causes us to overweight the latest information and underweight longer-term trends. When markets had been preparing for 60-per-cent tariffs, the 'recent' news of 30-per-cent tariffs dominated all other considerations – including the fact that any tariff increase is economically harmful. Similarly, anchoring bias – our tendency to rely too heavily on the first piece of information we encounter – played a key role. Once investors had anchored to the possibility of 60-per-cent tariffs, 30 per cent seemed reasonable by comparison. This ignores the reality that a 0 per cent increase would be the economically optimal outcome. We see this same psychological phenomenon at work in everyday contexts. Consider restaurant menus that feature an extremely expensive item – a $200 wagyu steak or $500 bottle of wine. Whether intentional or not, these high-priced options shift our reference point, making the $75 filet mignon suddenly feel like a reasonable choice by comparison. It's not a marketing trick so much as a natural consequence of how our brains process relative value. In markets, the threat of catastrophic tariffs created a similar psychological anchor, making merely damaging tariffs feel like a relief. Optimism bias further amplifies these psychological effects. Research led by Tali Sharot at University College London has shown that humans have a natural tendency to focus on positive information and play down negative outcomes – a phenomenon rooted in the brain's reward and learning systems. This helps explain why investors might mentally transform 'still-bad-but-less-bad' news into 'good' news, celebrating any outcome that exceeds their worst fears. Their focus on immediate relief, rather than future consequences, may cause them to overlook or underestimate potential long-term risks such as the cumulative damage from increased trade barriers. For investors, these psychological quirks create significant risks. When markets rally on objectively negative news simply because it wasn't as catastrophic as feared, it creates a disconnect between asset prices and economic fundamentals. This disconnect eventually corrects, often painfully. The more prudent approach is to evaluate news based on absolute impact rather than relative to expectations. A 30-per-cent overall tariff on Chinese goods, agreed for 90 days, will still disrupt supply chains, increase consumer prices and potentially slow economic growth. These fundamental factors should matter more than the relief of avoiding a 60-per-cent increase. Investors would be wise to ask themselves: Am I celebrating less-bad news as if it were genuinely positive? Have my reference points shifted to the point where I'm accepting suboptimal outcomes? Is my relief at avoiding disaster clouding my judgment about actual risks? Not that investors should be perpetually pessimistic. Rather they should maintain perspective and awareness to separate emotional reactions from objective analysis. The 30-per-cent tariff news wasn't good – it was simply less bad than feared. The market's exuberant reaction says more about psychology than economic fundamentals. As investor Howard Marks wisely noted: 'It's not what you buy or at what price that determines your outcome, but what happens subsequently relative to what the market expected at the time of purchase.' Understanding this principle – and our tendency to irrationally cheer when things are merely less terrible than expected – is essential for both investment success and personal growth.
Time of India
16-05-2025
- Politics
- Time of India
Of Betrayals, Victories And Blockchains
Comms wars are shaping our reality, but we can fight back We are in the midst of a communication war. From what we consume on TV and internet to our visits to shopping malls and our news consumption patterns, there is a constant battle for our attention. Surprisingly, the same mechanisms that influence our choices offline also nudge our decisions online, providing a powerful tool to communicators. So what is the truth? Do we really have a grip on reality? In The War For Reality: How to Win in the World of Fakes, Truths, And Communities, Dmytro Kuleba, the former foreign minister of Ukraine, approaches the subject from the unique perspective of his country's war against Russian aggression. While the book provides deep insights into the communication war being waged in Ukraine alongside the physical war, the lessons learnt can be applied universally. The book says that the truth lies somewhere between fakes and real truths because everyone can have a different version of the truth. The internet is the natural battleground for communicators. Particularly because of the innate power of images and videos to evoke responses from our brain. This is also the reason behind the rise of GAFA – Google, Amazon, Facebook and Apple – who have figured out how to hack into our brains. Note that these organisations have no qualms about working with local govts of any kind. And authoritarian countries like Russia have taken advantage of this, says the book. But can blockchain tech rid us of our sin? It certainly narrows the scope for manipulation. But the 51% rule and blockchain oracles present a dilemma. The requirement of approval by 51% participants to change a fixed blockchain fact is a high bar, but not impossible to overcome by corporations, billionaires and govts. Similarly, blockchain oracles have to rely on users and available data to adjudicate a contestation over a fact. For example, Ukraine claims that Russia occupied Donbas, whereas Russia insists on a civil war happening there. Both sides would want to introduce their facts in blockchain. But for blockchain oracles to make a decision it would have to rely on data that itself might be manipulated or incomplete. What about persuasion? Can critical thinking be incentivised? As Nobel laureate Daniel Kahneman postulated, human thinking can be of two kinds – instinctive and rational. The former is immediate and emotional. The latter needs to be constantly switched on by human effort. Therefore, people often make the easiest, and not the most rational, choices. Yet, it's possible to nudge people towards making desired decisions. Supermarkets in Ukraine started to mark Russian goods with the Russian flag after the beginning of the war in 2014. This immediately saw Ukrainians refuse to buy these goods. So, apart from internal effort, rational choices can be facilitated through external nudges, the book says. Of course, manipulators also have the same tools at their disposal. This is why it's important to control our emotions. The book says communicators of aggression and temptation are aware that sex, internet and drugs have just the same impact. The goal is to produce dopamine. In this context, betrayal is also a very powerful emotion, while peace is meaningless to those who have not known war. Therefore, 'betrayals' and 'victories' are easily controlled by the toggle switch of communications. Politicians know this very well, and now have sophisticated tools to manipulate people more efficiently. So, what should we do? Filter emotionally charged news and conspiracy theories, actively search for positive information, don't look at the world through the lens of 'betrayals' and 'victories', and don't get tired of fighting for real values: tough but doable. Facebook Twitter Linkedin Email Disclaimer Views expressed above are the author's own.
Business Times
13-05-2025
- Business
- Business Times
Five insights to put market volatility in perspective
YOU wouldn't be human if you didn't fear loss. Nobel Prize-winning psychologist Daniel Kahneman demonstrated this with his loss-aversion theory, showing that people feel the pain of losing money more than they enjoy gains. As such, investors' natural instinct is to flee the market when it starts to plummet, just as greed prompts us to jump back in when stocks are skyrocketing. Both can have negative impacts. Given the uncertain environment, investors may have doubts about their investment approach. It is natural to seek calmer shores when markets are choppy. But it is equally important to step back, gain perspective and look towards the horizon. History shows stock markets have always recovered from previous declines, although there is no guarantee downturns will lead to rebounds. Here are five insights that can help investors regain confidence and stay invested for the long haul. When in doubt, zoom out If you go back to 2018, the first Trump administration's tariffs on China sparked a trade war that panicked markets and dominated the news. What's more, two US government shutdowns, challenging Brexit negotiations and a contentious mid-term election further stoked market pessimism. How did stocks react? Fears that a trade war between the two largest economies would lead to a global slowdown sent the S&P 500 down 4.4 per cent in 2018, falling as much as 19.4 per cent from Sep 20 to Dec 24 that year. But the index recovered sharply in 2019 – up 31.1 per cent – as trade deals were announced and consumer spending steadied. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Will market choppiness in 2025 give way to smoother sailing in 2026? There is no way to tell, but next year's mid-term elections could shift the Trump administration's focus to trade deals and more bread-and-butter issues that add economic optimism rather than uncertainty. Markets typically recover quickly While markets can be treacherous during periods of heightened volatility, they have often bounced back quickly. Indeed, stock market returns have typically been strongest after sharp declines. The average 12-month return from the S&P 500 immediately following a 15 per cent or greater decline is 52 per cent. That is why it is often best to remain calm and stay invested. How often do market corrections of 10 per cent or more in the S&P turn into entrenched bear markets? Turns out, not often. More common are short periods of pullbacks ranging from 5 to 10 per cent. While these may feel unsettling, a drop of 5 per cent occurred twice per year on average, while corrections of 10 per cent or more happened every 18 months on average, from 1954 to 2024. And while intra-year declines are common, the good news is 37 of the last 49 calendar years have finished with positive returns for the index. Bear markets have been relatively short-lived A long-term focus can help investors put bear markets in perspective. From Jan 1, 1950, to Dec 31, 2024, there were 11 periods of 20 per cent-or-greater declines in the S&P 500. And while the average bear market decline of 33 per cent a year might have been painful to endure, missing out on the average bull market's 265 per cent return could have been far worse. Bear markets are also typically much shorter than bull markets. Bear periods have averaged 12 months, which can feel like an eternity, but pale in comparison with the 67 months of average bull markets – another reason why trying to time investment decisions is ill-advised. Most bear markets coincide with recessions, which are also relatively infrequent. Without a recession, a growing economy can still spur positive corporate earnings growth, which supports equity prices. Market declines outside of a recession have tended to be shorter than those during a recession, lasting about six months versus 17. Forecasting recessions is tough. Many investors, for example, were bracing for a recession when the Federal Reserve raised rates in 2022 to combat sky-high inflation. Instead, the US economy grew, and markets posted double-digit gains in 2023 and 2024. Today, steep tariffs elevate the risk of a recession. Policy uncertainty is causing companies to pause investments and hiring while prompting consumers to reduce spending. But the economy has surprised to the upside before, and it's too early to tell if widespread job losses, the hallmark of a recession, will occur. Bonds offer balance In periods of slowing economic growth, bonds often shine brightest. In fact, it is the reason why high-quality bond funds are often the foundation of a classic 60 per cent equities and 40 per cent bonds portfolio. While the exact allocation may shift, a diversified portfolio is intended to generate attractive returns while minimising risk. Bonds tend to zig when equity markets zag, and so far this year that pattern is holding. Bonds have returned 1.88 per cent this year to Apr 15, compared to the 7.89 per cent decline for the S&P 500. An exception was 2022 when stocks and bonds both fell significantly in the face of rising inflation and rapid interest rate hikes by the Fed. Markets are pencilling in rate cuts this year in anticipation of a tariff-induced economic slowdown. Fed officials face a challenging backdrop when it comes to determining an appropriate policy response. They need to balance labour market and growth concerns with potential inflationary pressures. Still, significant economic downturns have typically been met with rate cuts, which should have helped boost returns for core bond funds during these periods, as represented by the Bloomberg US Aggregate Bond Index. Bonds should offer diversification in equity market downturns as their prices normally rise as yields fall. Moreover, with bonds offering compelling income potential today, investors may be able to take on less risk with high-quality bonds while still meeting their return expectations. Staying the course pays off for long-term investors When markets are volatile, it is hard to resist the urge to do something. Suggestions to stay the course offer little comfort when markets and emotions are spiralling. But in many cases, the best course of action has been none at all. The lesson? Market declines can be painful to endure, but rather than trying to time the market, investors would be wise to stay the course. To weather market volatility, they should seek diversification across stocks and bonds, while periodically examining their risk tolerance for elevated volatility. Though it may feel like this time is different, markets have shown resilience throughout history when confronted by wars, pandemics and other crises. The writer is head of client group (Southeast Asia), Capital Group
