Nowhere in the modern world do we see the effects of our emotional behavior more clearly than in markets. Our emotions lead us to be overconfident when we should be humble, panicked when we should be circumspect, and deeply engaged in seeking information that conforms (rather than disconfirms) our preexisting beliefs. . . .
According to Bernstein, humans are "cognitive misers," relying on simple narratives instead of using complex analytical thinking. The more compelling the narrative is, the more corrosive it becomes to our analytical abilities.
-Barry Ritholz, How Not To Invest: The Ideas, Numbers, and Behaviors That Destroy Wealth—And How to Avoid Them
Posts
No comments:
Post a Comment