Nicholas Mitsakos Discusses the Complexity of Successful Investing. There Is No Simple Formula.
Straightforward analysis and simple formulas are inadequate. In Nicholas Mitsakos’s new book, “Investment Principles: Strategies for an Irrational World” (Investment Principles: Strategies for an Irrational World), he discusses a variety of disciplines that require a depth of understanding and analysis. Each one of these areas, ranging from economic analysis to globalization, to human behavior, would each require study and understanding. Interconnecting these and other areas is the key to investment success, so says Nicholas Mitsakos.
His book is organized in such a way that it can be read as a narrative on investing success, as well as be a reference book with distinct sections. Investment Principles: Strategies for an Irrational World is broken into several topics and subtopics meant to stand on their own. The book is as much a reference book, with distinct sections intended to deal with independent topics in greater depth and understanding. The book is organized this way, as Nicholas Mitsakos states, because he proposes that thoughtful observation of complex factors and understanding their interrelation are necessary but not sufficient for successful investing.
Investment success, according to Mr. Mitsakos, is accurately predicting the future. That requires a greater breadth and depth of understanding of many seemingly unrelated topics. Nicholas Mitsakos discusses this at length in his book and describes it as creating a context for understanding — a way to think about how to think. Nicholas Mitsakos believes approaching investment decisions with this methodology is more important than any simple formula or narrow analytical approach.
Those looking for a simple formula and they “how to pick stocks” book will be disappointed. Those who want their intelligence respected and given a methodology and foundation to think more thoroughly and successfully will be rewarded. In Nicholas Mitsakos’s new book there is no simple formula. Complex factors, understanding their interrelation, and predicting the outcome of these interactions require “slow thinking.” This is demanding work, as Daniel Kahneman explained in his book “Thinking, Fast and Slow.” That is why the book does not contain a series of numerical models and algorithms. These tools are a simplified sideshow intended to turn numerous and dynamic factors into a simple, and typically misleading, analysis.
Nicholas Mitsakos believes reducing complex analysis to simple numerical models and algorithms delivers misleading and inaccurate results far too often. For the most part, he believes this approach is nonsense. Often, numerical models and algorithms are a simplified sideshow intended to turn numerous and dynamic factors into an easy-to-understand, typically misleading analysis, and ultimately worthless exercise.
Nicholas mitsakos believes it is important to consider a wide range of factors when looking at investment possibilities and developing a successful investment strategy. Many topics, including disruptive innovation, new technologies, globalization, leadership, fiscal and monetary policy, and other topics, usually relegated to economics or behavioral textbooks, play an outsized role in influencing investments and their ultimate value. Inferior performance comes from not understanding that all these elements, as well as human behavior and irrational choices, influence investments disproportionately. Reducing this to a formula is not effective and for the most part, wasted energy.