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Warren Buffett: Success in investing doesn't correlate with IQ

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Re: Warren Buffett: Success in investing doesn't correlate with IQ

#51

Post by Kudzu_Bob »

btilly wrote: post #22
thewarrior wrote: post #14

Earlier quoted context omitted.

Could you please lead me to the sources .Its just to console and motivate myself . Because I find this very hard to believe .

According to page 8 of http://mathdl.maa.org/images/upload_library/22/Polya/0746834... the noted mathematician http://en.wikipedia.org/wiki/Julia_Robinson had a measured IQ of 98. He was in a different field, but Richard Feynman's mathematical genius is in dispute by nobody. However his measured IQ is widely quoted at 125. IQ is somewhat correlated with intelligence, which is somewhat correlated with mathematical abi…

Physicist Steve Hsu on Feynman's alleged 125 IQ score:

"Feynman was universally regarded as one of the fastest thinking and most creative theorists in his generation. Yet it has been reported-including by Feynman himself-that he only obtained a score of 125 on a school IQ test. I suspect that this test emphasized verbal, as opposed to mathematical, ability. Feynman received the highest score in the country by a large margin on the notoriously difficult Putnam mathematics competition exam, although he joined the MIT team on short notice and did not prepare for the test. He also reportedly had the highest scores on record on the math/physics graduate admission exams at Princeton. It seems quite possible to me that Feynman's cognitive abilities might have been a bit lopsided-his vocabulary and verbal ability were well above average, but perhaps not as great as his mathematical abilities. I recall looking at excerpts from a notebook Feynman kept while an undergraduate. While the notes covered very advanced topics for an undergraduate-including general relativity and the Dirac equation-it also contained a number of misspellings and grammatical errors. I doubt Feynman cared very much about such things."

http://www.psychologytoday.com/blog/finding-the-next-einstei...

Re: Warren Buffett: Success in investing doesn't correlate with IQ

#52

Post by gfodor »

mc-lovin wrote: post #33
gfodor wrote: post #26

Earlier quoted context omitted.

He acts on what he perceives as mispricings in the market. That these mispricings may be caused or magnified by his own actions in the companies he is involved with isn't really the point.

You don't seem to understand what is meant by the term "efficient market". The efficient market hypothesis does not preclude the possibility that share prices could be improved by a buyout or activist shareholder.

Yes but most of what Buffett does is not activist shareholder action or buyouts, it's security/company analysis. Then once he finds an underpriced company (as was the most recent case by Heinz) he then takes an action to get the best price for the shares for Berkshire. The market won't digest the information of these private negotiations of course but up until that point Buffett's idea generation is largely driven by the public price of securities, at least according to what he tells us.

Re: Warren Buffett: Success in investing doesn't correlate with IQ

#53

Post by gfodor »

mc-lovin wrote: post #11
adventured wrote: post #7

Earlier quoted context omitted.

I assume you're joking, since the stock market is anything but efficient. If it were, as Buffett has noted frequently, his success would have been completely impossible. Indeed, the most money is made from the highest inefficiencies. And there's no inherent or guaranteed mechanism that drives under or over valued stocks back into any theoretical fair value line. Stocks are governed by human judgment ultimately - whic…

I wasn't joking. > If it were, as Buffett has noted frequently, his success would have been completely impossible. Indeed, the most money is made from the highest inefficiencies. Survivorship bias? I don't know, but in any case market efficiency is a very general claim, it doesn't rule out some "special" people with innate talent to predict future prices. >And there's no inherent or guaranteed mechanism that drives u…

The survivorship bias argument to explain people like Buffett is ridiculous. Before you continue to tell myself and others to read up on CAPM, the EMH, portfolio theory, and so on (which I have, extensively), I suggest you read up on Buffett and his approach to investing. He vocally rejected the EMH decades ago, and has continued to produce outsized returns. The proof of the pudding is in the eating and Buffett has managed to be right much more often than the academics and their insane asset and derivative pricing models.

Re: Warren Buffett: Success in investing doesn't correlate with IQ

#55

Post by tokenadult »

clarkm wrote: post #46
tokenadult wrote: post #9

Earlier quoted context omitted.

I seriously doubt if an IQ of 120 is sufficient to become an eminent mathematician. That is an empirical question, and the historical answer is that that IQ level suffices.

Not true - there are tons of studies that show otherwise, so I have no idea how this myth still exists. An IQ of 120 is the top ~10%. Here's a 25 year longitudinal study [1] of over 1,500 students that were all in the top 1% and it shows significant differences between the lowest and the highest quartile (who were in the top .01%): > Ability Differences Among People Who Have Commensurate Degrees Matter for Scientific…

I know David Lubinski, one of the investigators in that correlational study, reasonably well. (He and I are alumni of the same school district and same undergraduate university, and have many mutual friends besides meeting each other in conferences from time to time.) It's important to distinguish the claim about the Study of Mathematically Precocious Youth (of whom my son is one participant) and my claim about mathematical "genius" in general. The claim you cite is that frequency of eminent accomplishment in that study population increases as SAT scores at age twelve increase. That may be. My claim is that the threshold IQ score for eminent accomplishment in mathematics and other domains that recognize "genius" is no higher than 120, and I have Arthur Jensen and Hans Eysenck and the Terman longitudinal study on my side as I make that claim.

Re: Warren Buffett: Success in investing doesn't correlate with IQ

#56

Post by tokenadult »

Kudzu_Bob wrote: post #51
btilly wrote: post #22

Earlier quoted context omitted.

According to page 8 of http://mathdl.maa.org/images/upload_library/22/Polya/0746834... the noted mathematician http://en.wikipedia.org/wiki/Julia_Robinson had a measured IQ of 98. He was in a different field, but Richard Feynman's mathematical genius is in dispute by nobody. However his measured IQ is widely quoted at 125. IQ is somewhat correlated with intelligence, which is somewhat correlated with mathematical abi…

Physicist Steve Hsu on Feynman's alleged 125 IQ score: "Feynman was universally regarded as one of the fastest thinking and most creative theorists in his generation. Yet it has been reported-including by Feynman himself-that he only obtained a score of 125 on a school IQ test. I suspect that this test emphasized verbal, as opposed to mathematical, ability. Feynman received the highest score in the country by a large…

Steve Hsu and his comments on IQ embarrass the actual research psychologists I know. Just in the last week a psychologist sent me a link to a take-down of Hsu's latest project.

http://www.nature.com/news/chinese-project-probes-the-geneti...

The psychologist who sent me the link, and another psychologist colleague of his who was copied on the same email, are both experienced and astute human behavior geneticists (the other recipient was a math major as an undergraduate who became a psychology research after a mathematical career) and they don't agree with Hsu's conclusions about current data.

Re: Warren Buffett: Success in investing doesn't correlate with IQ

#57

Post by Kudzu_Bob »

tokenadult wrote: post #56
Kudzu_Bob wrote: post #51

Earlier quoted context omitted.

Physicist Steve Hsu on Feynman's alleged 125 IQ score: "Feynman was universally regarded as one of the fastest thinking and most creative theorists in his generation. Yet it has been reported-including by Feynman himself-that he only obtained a score of 125 on a school IQ test. I suspect that this test emphasized verbal, as opposed to mathematical, ability. Feynman received the highest score in the country by a large…

Steve Hsu and his comments on IQ embarrass the actual research psychologists I know. Just in the last week a psychologist sent me a link to a take-down of Hsu's latest project. http://www.nature.com/news/chinese-project-probes-the-geneti... The psychologist who sent me the link, and another psychologist colleague of his who was copied on the same email, are both experienced and astute human behavior geneticists (the…

Hsu's claim in this matter is much easier to swallow than your contention that an IQ of 120 is sufficient for eminence in any field. Next you'll be telling us that anybody over five and a half feet tall can play for the Knicks.

Re: Warren Buffett: Success in investing doesn't correlate with IQ

#58

Post by ekm2 »

tokenadult wrote: post #56
Kudzu_Bob wrote: post #51

Earlier quoted context omitted.

Physicist Steve Hsu on Feynman's alleged 125 IQ score: "Feynman was universally regarded as one of the fastest thinking and most creative theorists in his generation. Yet it has been reported-including by Feynman himself-that he only obtained a score of 125 on a school IQ test. I suspect that this test emphasized verbal, as opposed to mathematical, ability. Feynman received the highest score in the country by a large…

Steve Hsu and his comments on IQ embarrass the actual research psychologists I know. Just in the last week a psychologist sent me a link to a take-down of Hsu's latest project. http://www.nature.com/news/chinese-project-probes-the-geneti... The psychologist who sent me the link, and another psychologist colleague of his who was copied on the same email, are both experienced and astute human behavior geneticists (the…

Another eminent psychologist seems to think that same project may be onto something.

http://edge.org/response-detail/23838

Re: Warren Buffett: Success in investing doesn't correlate with IQ

#59

Post by btilly »

Kudzu_Bob wrote: post #51
btilly wrote: post #22

Earlier quoted context omitted.

According to page 8 of http://mathdl.maa.org/images/upload_library/22/Polya/0746834... the noted mathematician http://en.wikipedia.org/wiki/Julia_Robinson had a measured IQ of 98. He was in a different field, but Richard Feynman's mathematical genius is in dispute by nobody. However his measured IQ is widely quoted at 125. IQ is somewhat correlated with intelligence, which is somewhat correlated with mathematical abi…

Physicist Steve Hsu on Feynman's alleged 125 IQ score: "Feynman was universally regarded as one of the fastest thinking and most creative theorists in his generation. Yet it has been reported-including by Feynman himself-that he only obtained a score of 125 on a school IQ test. I suspect that this test emphasized verbal, as opposed to mathematical, ability. Feynman received the highest score in the country by a large…

There is no surprise here. As http://vserver1.cscs.lsa.umich.edu/~crshalizi/weblog/523.htm... makes clear, we consider someone "intelligent" because they possess many abilities of interest. But the possession of one ability (eg mathematical reasoning) is not well correlated with the possession of another (eg verbal ability). Unless you possess all of those, you won't score at the top in IQ.

But to excel in any specific field does NOT so much require top mental abilities of all kinds as exceptional ones required by that field. Not having a decent baseline of all abilities will be a handicap - you need that - but a Richard Feynman does not need to be a genius grammatically.

IQ tests are a very limited tool. They test a breadth of abilities and can indicate that you can do reasonably well at many things. (Indeed for a wide range of jobs, an IQ test is a better predictor of performance than your performance on the job interview!) However they can't recognize that you're truly exceptional at any particular thing.

Re: Warren Buffett: Success in investing doesn't correlate with IQ

#60

Post by btilly »

tokenadult wrote: post #56
Kudzu_Bob wrote: post #51

Earlier quoted context omitted.

Physicist Steve Hsu on Feynman's alleged 125 IQ score: "Feynman was universally regarded as one of the fastest thinking and most creative theorists in his generation. Yet it has been reported-including by Feynman himself-that he only obtained a score of 125 on a school IQ test. I suspect that this test emphasized verbal, as opposed to mathematical, ability. Feynman received the highest score in the country by a large…

Steve Hsu and his comments on IQ embarrass the actual research psychologists I know. Just in the last week a psychologist sent me a link to a take-down of Hsu's latest project. http://www.nature.com/news/chinese-project-probes-the-geneti... The psychologist who sent me the link, and another psychologist colleague of his who was copied on the same email, are both experienced and astute human behavior geneticists (the…

I read the article. Here is my personal reaction.

The sample size is indeed too low to have the statistical power to draw any solid conclusions. However it could be large enough to produce a set of candidate genes which reasonably might have small individual impacts on IQ. If you then could do a follow-up on a large population just looking at those genes, some of those candidates are likely to prove out.

It is a fishing expedition. You never know what you'll find. The odds that you come back empty handed are high. But it is still worth doing.

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