We have already been introduced to Mr. Market. He is described by Warren Buffet as having incurable emotional problems. In truth, his emotional problems are the least part of it. What he really suffers from is behavioral biases and a propensity to make cognitive errors.

As it impacts investors, behavioral psychology looks at the pervasive influence of intuitive impressions on our thoughts and our choices.

How humans generate intuitive answers to complex questions.

Finding … causal connections is part of understanding a story and is an automatic operation of System 1. System 2, your conscious self, was offered the causal interpretation and accepted it.

Calculating where we can, but often falling back for our motive on whim or sentiment or chance.

Some people, some investors, never seem to learn, no matter how smart they are.

The accurate intuitions of skilled experts are what I think of as learned intuitions. It seems they can be learned through a combination of study and the school of hard knocks.

When you realize you are as biased as everyone else, you’ve won the game.

The gap-to-edge rules help the investor to avoid the behavioral gap and provide him with a behavioral edge. Beat the behavioral gap and take advantage of the behavioral edge.