Our gut needs training. Many of our instinctive feelings are the exact opposite of what we should be doing.
Market conditions are fixed only in part by balance sheets and income statements; much more by the hopes and fears of humanity; by greed, ambition, acts of God, invention, financial stress and strain, weather, discovery, fashion, and numberless other causes impossible to be listed without omission
The house of fear has many windows
Probabilities are at the heart of investing. We look at examples of our human frailties in assessing probabilities.
Risk aversion is an unwillingness to take on a risk in spite of the fact that the reward amply justifies the risk taken
No investment decision should ever be motivated by trying to beat the market. The moment this impulse creeps in, the investor is liable to risk seeking behavior.
Investors always need to be alert for things that make us risk seeking. Risk seeking is bad. Risk seeking is being willing to take a risk even if the chances of success are poor. Risk seeking causes investors to lose money.