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.
behavioral biases
Experience and becoming a really successful investor
You can continue to learn and improve your investing skills year after year.
Your investment style may be stuck in a bad grove in a changing world
It’s not that the contrary views aren’t there. We just ignore them.
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.
The psychology of probability
Probabilities are at the heart of investing. We look at examples of our human frailties in assessing probabilities.
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.
Beat the behavioral gap and take advantage of Mr. Market’s foibles
The greatest failing of most investors, both professional money managers and individual investors, is a failure to understand the impact of their own very human behavior and that of stock market participants as a whole.
Why is it so difficult to change our view of things?
When we own a stock, let’s face it, we love to see articles and reports that confirm our positive view of our investment. It’s human nature. It makes us feel good. On the flip side, we tend not to see or notice negative opinions.
The frailty of high conviction ideas
We need to have full confidence in our judgement about a company if we are to make a serious financial commitment to it. But, the strength of our belief that we are right has nothing to do with the validity of our judgement. And, if that sounds weird, blame in on behavioral psychology.
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