A set of rules to develop a behavioral edge – Part 7
Subjective confidence in a judgment is not a reasoned evaluation of the probability that this judgment is correct
Part 2: Human Foibles and Investment Decision Making
A set of rules to develop a behavioral edge – Part 6
The strong bias toward believing that small samples closely resemble the population from which they are drawn is also part of a larger story
A set of rules to develop a behavioral edge – Part 5
Our mind searches for confirming evidence that we are right and shies away from contrary evidence.
A set of rules to develop a behavioral edge – Part 4
Herding. All stock market prices are both the cause and result of herding behavior amongst investors.
A set of rules to develop a behavioral edge – Part 3
Our gut needs training. Many of our instinctive feelings are the exact opposite of what we should be doing.
A set of rules to develop a behavioral edge – Part 2
It is very important not to fall into the attractive trap of extrapolating the most recent past into the future.
A set of rules to develop a behavioral edge – Part 1
Today everyone is fretting about inflation and the potential for a recession. Trying to decide on the outlook for these macro-economic things can be a distraction.
Can we use heuristics to analyze a business?
Adequate, though often imperfect, answers to difficult questions
The inherently short-term nature of the investment management industry
Market conditions are fixed only in part by balance sheets and income statements; much more by the hopes and fears of humanity; by greed, ambition, acts of God, invention, financial stress and strain, weather, discovery, fashion, and numberless other causes impossible to be listed without omission
Quantitative vs intuitive in investing
Human decisions affecting the future, whether personal or political or economic, cannot depend on strict mathematical expectation, since the basis for making such calculations does not exist.
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