So the bottom line of the article is that High IQ people have a monopoly on arrogance? That was 10 minutes of my life I won't be getting back. I did enjoy the quote from Jay Zagorsky but that was excerpted from the list and I didn't need to read the article to see it. He got a lot of mileage from a zero correlation or in his words, "Intelligence is not a factor for explaining wealth." That is getting some good mileage out of a nonsignificant result. My favorite part though is when he goes on to comfort those humble, self-deprecating, low IQ investors who must feel badly that they are not cognitively equipped to make the big money. His comforting words: "Those with low intelligence should not believe they are handicapped, and those with high intelligence should not believe they have an advantage." Of course, one problem with that scenario is that I don't know that I have ever met someone who didn't believe they were intelligent (OK, they'll admit, maybe not with book smarts but certainly with common sense or street smarts or money sense or the most important real life wisdom that they don't reward in no school).
One lesson of this thread is that zero correlations can certainly be over-interpreted. Yes, there may not be a correlation between IQ and great wealth but I doubt there is much of a correlation between any identifiable variable and great wealth. People seem to think that zero correlations are actually negative correlations. The fact that there is no relationship between High IQs and great wealth is not evidence that you can be too smart to be wealthy. Great wealth is bestowed on those who, for whatever set of fortuitous circumstances happen to be in right place at the right time. How many people do you suppose there are who quit college (or dropped out of high school) to start a business in their garage? What percentage of them do you suppose ended up as billionaires? Even if, retrospectively, you could identify some variables that all billionaires shared, that wouldn't mean that you could duplicate their success by mimicking those variables. (Imagine The Boys from Brazil with all the little kids wearing Bill Gates glasses). Rick Dr. Rick Froman, Chair Division of Humanities and Social Sciences Box 3055 x7295 rfro...@jbu.edu http://tinyurl.com/DrFroman Proverbs 14:15 "A simple man believes anything, but a prudent man gives thought to his steps." -----Original Message----- From: Mike Palij [mailto:m...@nyu.edu] Sent: Tuesday, October 06, 2009 8:05 AM To: Teaching in the Psychological Sciences (TIPS) Cc: Mike Palij Subject: [tips] From the "If You're So Smart How Come You Ain't Rich? Department" The Motley Fool website (a website that provides stock and investing advice) has a little article titled "Are You Too Smart to Be Rich?" in which the author goes over the reasons for why "smart people" (aka Big Brain/High IQ types -- I think that's a Jungian category :-) do badly at getting wealthy. Although skimpy on details (e.g., Michael Lewis wrote about the collapse of Long-Term Captial Management, an investment house with a couple of Nobel prize winning economists and heavy duty quantitative modelers and the collapse was not as simple as presented here; Lewis' article appeared in the NY Times and I provided a link to in a previous post to TiPS, so one should be able to search the archives for it). For more, see: http://www.fool.com/investing/value/2009/09/28/are-you-too-smart-to-be-rich.aspx To provide a sense of the presentation consider the following quote: |Economist Jay Zagorsky ran a study to determine whether |brains translate into riches. His conclusion? "Intelligence is not |a factor for explaining wealth. Those with low intelligence should |not believe they are handicapped, and those with high intelligence |should not believe they have an advantage." | |In his book Outliers, Malcolm Gladwell explored example |after example of how the successful became so. He concluded |that "once someone has reached an IQ of somewhere around 120, |having additional IQ points doesn't seem to translate into any |measurable real-world advantage." I'm not a fan of Gladwell so I haven't read "Outliers" but I presume some Tipsters are fans and wonder if they can confirm that Gladwell actually says that one doesn't get a benefit for having an IQ over 120. Some people seem to believe in this as shown in the following quote: |Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) billionaire |Warren Buffett seems to agree: "If you are in the investment business |and have an IQ of 150, sell 30 points to someone else." Anybody know where one can sell some excess IQ points? ;-) -Mike Palij New York University m...@nyu.edu --- To make changes to your subscription contact: Bill Southerly (bsouthe...@frostburg.edu) --- To make changes to your subscription contact: Bill Southerly (bsouthe...@frostburg.edu)
