Danny Kahneman type risk policies for investors
Investor psychology can cause a security to be priced just about anywhere in the short run, regardless of its fundamentals
Investor psychology can cause a security to be priced just about anywhere in the short run, regardless of its fundamentals
We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful
Each post has a list of what Daniel Kahneman, a Nobel Prize winning psychologist, calls risk policies and I call gap-to-edge rules.
Our mind searches for confirming evidence that we are right and shies away from contrary evidence.
You can continue to learn and improve your investing skills year after year.
It’s not that the contrary views aren’t there. We just ignore them.
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.
Probabilities are at the heart of investing. We look at examples of our human frailties in assessing probabilities.
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.
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.
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