The disposition effect is the tendency that all investers have to sell their winners and hold their losers. When we sell our winners, we are greedy for the swirl of chemi s that go off in our brain only when we actually stell a winner. Having an appreciated stock doesn't do us any good as far as our brain chemistry is concerned. And final point here is professor terence oden at calberkeley. Is a wonderful guy, and has written about number of these in an academic setting,. shows proves how they affect performance.
IN THIS EPISODE, YOU’LL LEARN:
05:03 - How we can avoid using our emotions to make investments in the stock market.
09:08 - How to think about risk in your portfolio.
11:29 - What the disposition effect is and why you might want to think twice before selling your winners.
25:39 - Some of Scott’s biggest lessons from the rise and fall of the 1999 Tech Bubble.
30:45 - What biases investors should be most aware of.
30:45 - How recency bias leads investors to overpay for a company.
32:21 - How we as investors can act rationally during a financial crisis.
43:10 - Scott’s recommendation for how to invest in today’s market.
And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
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