The Psychology of Prediction

…..I believe in prediction. I think you have to in order to get out of bed in the morning.

But prediction is hard. Either you know that or you’re in denial about it.

A lot of the reason it’s hard is because the visible stuff that happens in the world is a small fraction of the hidden stuff that goes on inside people’s heads. The former is easy to overanalyze; the latter is easy to ignore.

This report describes 12 common flaws, errors, and misadventures that occur in people’s heads when predictions are made…..

More here – Collaborative Fund

PS: The snarky bastard in me wants to say that there are two major flaws that traders make with predictions. First, they make them and then they listen to them.