John Kay

The most remarkable thing about Warren Buffett’s achievements is not that no one has rivalled his record, it is that almost no one has seriously tried to emulate his investment style.

Probabilistic reasoning has become the dominant method of structured thinking about problems involving risk and uncertainty – to such an extent that people who do not think this way are derided as incompetent and irrational.

Physicists studying sport have established that many fieldsmen are very good at catching balls, but bad at answering the question: “Where in the park will the ball land?” Good players don’t forecast the future, but adapt to it.

Commercial decisions often reflect policy-based evidence, not evidence-based policy. Doing the deal is what matters; justification comes afterwards.

Goodhart suggested that any measure adopted as a target loses the information content that appeared to make it relevant. People change their behaviour to meet the target.

The argument that we need the best and latest is powerful in political decision making, even among people who would never behave that way in their everyday lives.

Is there such a thing as a business genius? It is a moot question this month, because in modern times Apple’s Steve Jobs, who died last week, was probably the individual with the strongest claim to that title.

The skill of the statesman is to distinguish situations in which ambiguity makes coexistence possible from those that will make the future more troublesome. In this respect, politicians who have steered world affairs through the financial crisis have not served us well.

Trams were phased out because they were inferior to buses as a means of public transport. They still are.

Always ask of data “what is the question to which this number is the answer?”. “Earnings before interest, tax, depreciation and amortisation on a like-for-like basis before allowance for exceptional restructuring costs” is the answer to the question “what is the highest profit number we can present without attracting flat disbelief?”.