Understanding Self-Deception in Investing

This chapter delves into five critical discoveries regarding self-deception in stock market behaviors, highlighting the dangers of stock picking and market timing. It explores cognitive biases that lead investors to favor familiar stocks, increasing risk through lack of diversification, and emphasizes the importance of decision control systems to mitigate impulsive decisions. Additionally, it discusses the Ulysses contract as a strategy for maintaining discipline in investment strategies and avoiding emotional pitfalls.