This type of person always wants more facts, more data, more proof from smart people. Since I am not a technical specialist, I did not have the scholarly proof that these types of individuals demanded-that is, until I read a great book on investing. James P. O'Shaughnessy wrote the perfect book for people who think that investing has to be risky, complex, and danger- ous. It is also the perfect book for those who want to think that they can outsmart the market. This book has the aca- demic and numerical proof that a passive or mechanical sys- tem of investing will in most cases beat a human system of investing ... even professional investors such as fund man- agers. This book also explains why nine out of ten investors do not make money. O'Shaughnessy's best-selling book is titled What Works On Wall Street: A Guide to the Best Performing Investment 84 Rich Dad's Guide to Investing Strategies of All Time. O'Shaughnessy distinguishes between two basic types of decision-making: 1. The clinical or intuitive method. This method relies on knowledge, experience, and common sense. 2. The quantitative or actuarial method. This method re- lies solely on proven relationships based on large sam- ples of data. O'Shaughnessy found that most investors prefer the intu- itive method of investment decision-making. In most in- stances, the investor who used the intuitive method was wrong or beaten by the nearly mechanical method. He quotes David Faust, author of The Limits of Scientific Reasoning, who writes, "Human judgment is far more limited than we think." O'Shaughnessy also writes, "All (speaking of money man- agers) of them think they have superior insights, intelligence, and ability to pick winning stocks, yet 80% are routinely out performed by the S&P 500 index." In other words, a purely mechanical method of picking stocks out performs 80% of the professional stock pickers. That means, even if you knew nothing about stock picking, you could beat most of the so- called well-trained and educated professionals if you followed a purely mechanical, non-intuitive method of investing. It is exactly as rich dad said: "It's automatic." Or, the less you think, the more money you make with less risk and with a lot less worry. Other interesting ideas that O'Shaughnessy's book points out are: 1. Most investors prefer personal experience to simple basic facts or base rates. Again, they prefer intuition to reality. Getting Rich Is Automatic 85 2. Most investors prefer complex rather than simple for- mulas. There seems to be this idea that if the formula is not complex and difficult, it can't be a good formula. 3. Keeping it simple is the best rule for investing. He states that instead of keeping things simple, "We make things complex, follow the crowd, fall in love with the story of a stock, let our emotions dictate decisions, buy and sell on tips and hunches, and approach each investment on a case-by-case basis, with no underlying consistency or strategy.