Investors overreact to vivid memories and recent events
The good news is that we can do something. Kahneman describes risk policies as decision rules that are always applied in similar situations.
Part 2: Human Foibles and Investment Decision Making
The worst behavioral bias – jumping to conclusions
The good news is that we can do something. Kahneman describes risk policies as decision rules that are always applied in similar situations.
Overcoming mistaken short term thinking with Kahneman style risk policies
Reduce or eliminate the pain of the occasional loss by the thought that the policy that left you exposed to it will almost certainly be financially advantageous over the long run
Explainer – herd mentality and poor investment results
People are rationally (?) choosing not to, as they see it, waste their time and effort in exercising their judgment about the market
Investment psychology explainer for Mr. Market – introduction
In truth, Mr. Market’s emotional problems are the least part of it. What he really suffers from is behavioral biases and a propensity to make cognitive errors.
Keeping your head in times of turmoil
Doing what everybody else is doing at the moment, and therefore what you have an almost irresistible urge to do, is often the wrong thing to do at all
The psychology of probability
Probabilities are at the heart of investing. We look at examples of our human frailties in assessing probabilities.
The psychology of risk
Risk aversion is an unwillingness to take on a risk in spite of the fact that the reward amply justifies the risk taken
Investors defending against management spin and ourselves
If you don’t know what framing is, it’s a wonder you survived this long. We can defend against misframing when others use it against us. But, as important, we can learn to be alert to our own lack of perspective and reframe our own view of things to our advantage.
Let’s face it, we’re really bad at patterns and statistics
In our hunt for the investment guru we get hit with a double whammy of cognitive errors. We see patterns in random data because we, as humans, love to find causes and patterns suggest causes. And, we jump to conclusions on the basis of statistically insignificant data, again, because we love to identify causes.