TIP579: Big Mistakes by Michael Batnick
We Study Billionaires - The Investor’s Podcast Network
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Staying Within Your Circle of Competence
This chapter explores the crucial lesson of investing within one's area of expertise, illustrated by the contrasting experiences of notable investors during market bubbles. It highlights the psychological challenges and risks associated with overconfidence, using specific examples of investment missteps, including Warren Buffett's purchase of Dexter's Shoes. The chapter serves as a reminder of the importance of adaptability and the behavior gap that often hinders amateur investors' performance.
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