Episode 237
 

E237 Olivier Sibony - How to Reduce Noise, Think Strategically and Make Smarter Investing Decisions

 
 
 
 
 

Olivier Sibony is a professor, author and advisor specializing in the quality of strategic thinking and the design of decision processes. Olivier is Professor of Strategy at HEC Paris. He is also an Associate Fellow of Saïd Business School in Oxford University, and has taught at London Business School, Ecole Polytechnique, ENA, IE Madrid, and other institutions. Previously, he spent 25 years with McKinsey & Company in France and in the U.S., where he was a Senior Partner.

Tyler and Olivier’s discussion focused on noise, the unwanted variability in our judgement. Topics included understanding noise, remedies to reduce noise, and how we can make smarter investing decisions.

Highlights include:

  • Defining judgement, variability and unwanted variability

  • Where noise comes from and why we’re susceptible to it

  • Understanding level, occasion and pattern noise

  • The only way to remove noise entirely

  • Techniques to reduce noise in investing, including leveraging the wisdom of crowds, weighing and comparing criteria uniformly and more

  • Why it’s important to consider the cost of noise reduction before acting on it

  • Noise versus cognitive bias

  • How to make decisions in evolving, uncertain circumstances

  • Why you should resist the temptation to learn too much from your mistakes

Connect with Olivier:

Website: http://www.oliviersibony.com
LinkedIn: https://www.linkedin.com/in/oliviersibony/
Twitter: twitter.com/siboliv

The following books were mentioned in the show:

Noise by Olivier Sibony, Daniel Kahneman, Cass Sunstein
Thinking Fast and Slow by Daniel Kahneman
Churchill by Andrew Roberts

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Tyler Chesser