Four Rules to Better Decision Making by 

Nobel laureate Daniel Kahneman. 

Mr. Kahneman has transformed the fields of economics and investing. He gives his advice for better decision making. 

1️⃣ Don’t Trust People, Trust Algorithms.

“Algorithms beat individuals about half the time. And they match individuals about half the time,” Kahneman said. “There are very few examples of people outperforming algorithms in making predictive judgments. 

An algorithm is a rule. You can just construct rules.”

And when we can’t use an algorithm, we should train people to simulate one.

“Train people in a way of thinking and in a way of approaching problems that will impose uniformity,” he said.

2️⃣ Take the Broad View.

“The single best advice we have in framing is broad framing,” he said. “See the decision as a member of a class of decisions that you’ll probably have to take.”

3️⃣ Test for Regret.

“Regret is probably the greatest enemy of good decision making in personal finance,” Kahneman said.

“Clients who have regrets will often fire their advisers,” he said.

4️⃣ Seek Out Good Advice.

So who is the ideal adviser? “A person who likes you and doesn’t care about your feelings,” Kahneman said.

I was recently interviewed for a piece on the Africa Tech sector. 

I’m curious if there is mutual sentiment on this list of South African’s ‘Soonicorns’?

I’m sure I missed some out. 

Please add to the list in the comments below. 

1. JUMO (FinTech)

2. VALR (FinTech)

3. TymeBank (FinTech)

4. Luno (FinTech)

5. Entersekt (FinTech)

6. Clickatell (Chat Commerce)

7. Yoco (FinTech)

Full disclosure, I’m not a shareholder or have a direct interest in any of these companies.

Sectors globally I’m seeing Unicorn* ‘Green shoots’:

1. SpaceTech 

2. BioTech / HealthTech

3. CleanTech / Renewables 

4. ⁠DeepTech / Advanced manufacturing, water, mining and materials. 

*A private company with an enterprise value of over $1B.

A popular academic paper from The University of Chicago Booth School of Business on the use of LLM’s in analysis of Financial Statements (May 2024). 

Abstract: “We investigate whether an LLM can successfully perform financial statement analysis in a way similar to a professional human analyst. 

We provide standardized and anonymous financial statements to GPT4 and instruct the model to analyze them to determine the direction of future earnings. 

Even without any narrative or industry- specific information, the LLM outperforms financial analysts in its ability to predict earnings changes. The LLM exhibits a relative advantage over human analysts in situations when the analysts tend to struggle. 

Furthermore, we find that the prediction accuracy of the LLM is on par with the performance of a narrowly trained state-of- the-art ML model. LLM prediction does not stem from its training memory. Instead, we find that the LLM generates useful narrative insights about a company’s future performance.

Last week, I did 3 walks in one week. With a school friend, a group of founders and a student. 

Why walking meetings?

Here are some research-backed benefits:

🖌️Enhanced Creativity: Studies show walking can increase creative output by up to 60%.

🧠 Improved Mental Clarity: Movement boosts mental clarity and cognitive function.

🤝 Stronger Relationships: Walking side-by-side fosters open communication and collaboration.

🤯 Stress Reduction: Nature and exercise significantly lower stress levels.

Join me in taking your next meetings on the move around the block or even better in nature!