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.
behavioral biases
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.
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 it on behavioral psychology.
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