And not only the pride of intellect, but the stupidity of intellect. And, above all, the dishonesty, yes, the dishonesty of intellect. Yes, indeed, the dishonesty and trickery of intellect.
-Leo Tolstoy
Can intellect be dishonest? Not accepting behavioral biases is one form of intellectual dishonesty. We have to accept our decision biases before we can change them. Part of the behavioral revolution is the acknowledgment of our decision flaws. Intellectual honesty requires discipline with decision-making.
Another interpretation is that there can be dishonesty to data. When data do not support a narrative, there is no truth. Ignorance is not knowing the data. Dishonesty is stating or believing a story that is not grounded in the data when you actually have looked at the data. Not accepting data is dishonest; nevertheless, there also has to be room for alternative interpretations of data. We are dishonest to the truth when we do not accept alternative arguments that better fit evidence.
Why follow this line of reasoning? Are those who are not quants or data driven, less honest? Do quants or systematic traders have the moral high ground by being data focused and less biased? We are not proposing answers; rather we are proposing more self-reflection in an industry that is long on ego and opinions. Money management is humbling and financial painful if we are not honest with our knowledge and limitations. The movement to passive investing, the increased use of quantitative tools, the stronger focus on risk management, and the acceptance of behavioral biases are all indicators that we are learning to be more honest with our intellect.