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November 07, 2012


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Charles Faulkner

Great quote, except it isn't the case at all. We now know that any perception of the world is not "simoly noting and observing what is the case." Our earliest conceptual categories - on which all the rest are based - are embodied. With our senses "taking in" the world, we develop the concepts of inside/outside and all the ideas associated with containers. With our convergent vision, we "see" a path and journey through life. We know from neuroscience experiments with babies that contrary to expectation experiences are carefully examined by those so-called "innocent eyes."

What children and "self-actualizing people" do appear to have in common is to conflate their inner and outer worlds and with this form of magical thinking ignore normative reality and discover things anew.

Kent Thune

Excellent and well-put points, Charles. I'm thankful to have brilliant readers!

I am no scientist but I certainly agree that there is a great amount of "examination" going on with children. However, would you agree that, as humans age they become more defined or perhaps more "compartmentalized?"

For example, a 4-year old does not categorize themselves as narrowly or as extensively as adults. For example, they do not think of themselves as rich, poor, democrat, republican, Christian, Muslim or Jew.

They learn the names of things in the manner they are taught. They will also attach meanings to the names as they are taught. They may attach a negative meaning to democrat and Muslim but a positive one to republican and Christian.

Worldviews are constructed from outside sources. A self-actualized individual has the capacity to "see" the shortfalls of categorization and dichotomy.

I'd love to know your thoughts. Thanks again for the comment...

Charles Faulkner

The childhood naming of something – the name being an attribute of the object and its essence – is an associative process of System 1 (see Kahneman) that persists into adulthood. It is also a property of magical thinking. To name something is to (increase the illusion of) control over it. For most people, and all four of Piaget's developmental psychological stages, the name is the thing. (The map is the territory.) Neo-Piagetian Robert Kegan proposes a 5th level where the ability to separate the definitional from the observational, and to create new categories. Buffett, Munger, Soros, Rogers, Taleb and a few others do this.
Children are creating (albeit conventional) categories. High functioning adults are recreating them.

Interestingly, the 'hardening' of the more abstract categories you mention – social standing, politics and religion – take place in later years.

Kent Thune

Thanks again for adding to the discussion, Charles.

I'm familiar with Kohlberg's theory of moral development, which I believe extends upon Piaget, whom I have not read.

I believe the idea that may tie all of our thoughts together is that children are "Pre-conventional" and the self-actualized adult may be considered "Post-conventional."

Most adults do not make it out of the Conventional stage, where ideals and dichotomy are normal.

This was the underlying purpose of my post, which followed the election: A person in the post-conventional stage has no significant moral or emotional connection to a particular political party and thus has no reason to argue or complain over which candidate wins or loses the election. The self-actualized individual does not rely on such outside conditions to be content or fulfilled.

Thanks again for your thoughts. I look forward to hearing from you again...

Charles Faulkner

The bigger point I see both of us making is that there are different levels of decision making, and they are suited to making certain kinds of decisions better than others. My analysis of the language (syntactic patterns, metaphors, imagery & associations) of most famously successful traders and investors shows them all to at Piaget's stage 4 or Kegan's stage 5. When well-intended 'young' traders and investors try to copy (mirror neurons) these individuals and/or their strategies, they don't realize they don't yet have the cognitive sophistication to make appropriate sense of what they are seeing and hearing. To say that success in trading and investing requires experience is a truism, but doe not speak to what kinds of experience.

Kent Thune

Good points, Charles. Your last comment reminds of something Barry Ritholtz said when I interviewed him for the MarketWatch article. Here's my question followed by his answer:

7. How important is intuition for the trader and how might information consumption affect it?

I don’t know, but I suspect intuition is wildly over-rated. Is it consistent, reliable, repeatable? If intuition was all that important than newbie traders with good intuition would be able to sit down at a desk and making a killing. That does not seem to ever happen. I suspect the best traders learn to internalize lots of what they have learned over time, and what appears to be intuition is really the result of 1000s of hours of hard work, research, practice, experience.

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About Kent Thune

  • Kent Thune is a philosopher who happens to be a money manager and freelance writer... Read More


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