TIP447: How to Build a Human Bias Defense System w/ Gary Mishuris
We Study Billionaires - The Investor’s Podcast Network
Understanding Biases in Investing
This chapter explores the concept of base rate neglect and its impact on investor decision-making, emphasizing how it leads to overestimation of potential returns. By comparing it with recency bias and discussing cognitive biases such as anchoring, the chapter provides insights into the importance of adapting investment strategies based on historical performance and new information. It advocates for a personalized investment approach while recognizing the dangers of social proof and the need for systematic evaluations of investment positions.
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