Two For One on Stupid Things People Do And Believe
Why Do We Believe Stupid Things – David Harding Why Do Smart People Do Foolish Things – Scientific American
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What I Learned from Losing $200 Million
I’d lost almost $200 million in October. November wasn’t looking any better. It was 2008, after the Lehman Brothers bankruptcy. Markets were in turmoil. Banks were failing left and right. I worked at a major investment bank, and while I didn’t think the disastrous deal I’d done would cause its collapse, my losses were quickly…
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The Ignorance of the Crowd
In 1907, Francis Galton asked participants at a county fair to estimate the weight of an ox. While most individuals guessed rather poorly, the median guess was within 1 percent of the ox’s true weight. It’s not a mysterious finding, as some people guess high and others guess low. When the group gets large, these cancel out and…
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Following The Stock Market Is Bad For Your Returns
This is a good piece – one those ones I wish I had written. Summary: The irony of equity investing is this: if you knew nothing about the stock market and did not follow any financial news, you have probably made a very handsome return on your investment, but if you tried to be a…
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How to Recharge Before You Lose All Your Money
Take a mental health day whenever you feel you need it. No one is going to be there to give you permission to do so. Trading is a grind and a marathon. Doing the same thing day in and day out can become monotonous. You’re not loser nor are you losing focus by taking care…
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Stress hormones in financial traders may trigger ‘risk aversion,’ contribute to market crises
High levels of the stress hormone cortisol may contribute to the risk aversion and ‘irrational pessimism’ found among bankers and fund managers during financial crises, according to a new study. Cortisol is a hormone secreted by the adrenal glands in response to moments of high physical stress, such as ‘fight or flight’. Importantly, cortisol also…
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8 Subconscious Mistakes Our Brains Make Every Day–And How To Avoid Them
Get ready to have your mind blown. I was seriously shocked at some of these mistakes in thinking that I subconsciously make all the time. Obviously, none of them are huge, life-threatening mistakes, but they are really surprising and avoiding them could help us make more rational, sensible decisions. Especially since we strive for self-improvement…
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Gamblers, Scientists and the Mysterious Hot Hand
IN the opening act of Tom Stoppard’s play “Rosencrantz and Guildenstern Are Dead,” the two characters are passing the time by betting on the outcome of a coin toss. Guildenstern retrieves a gold piece from his bag and flips it in the air. “Heads,” Rosencrantz announces as he adds the coin to his growing collection.…
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