We Study Billionaires - The Investor’s Podcast Network
TIP554: Mental Models for Successful Investing w/ John Jennings
May 21, 2023
John Jennings, President and Chief Strategist of St. Louis Trust & Family Office, shares his insights on navigating the complexities of investing. He discusses why humans are hard-wired to avoid uncertainty and how that affects investment behavior. Jennings emphasizes the importance of mental models for making smarter decisions and the common pitfalls of confusing correlation with causation. He also highlights how behavioral biases, like loss aversion, can mislead investors, and explores the role of luck in the unpredictable world of finance.
01:17:24
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Quick takeaways
- Recognizing patterns historically benefited survival, triggering a fight or flight response in times of uncertainty.
- Mastering mental models in investing aids in informed decisions, akin to successful investors like Charlie Munger.
Deep dives
The Psychological Impact of Uncertainty and Resolving It
Humans are hardwired to shy away from uncertainty as recognizing patterns historically led to survival advantages. In moments of uncertainty, individuals feel anxious and antsy, triggering fight or flight responses. Resolving uncertainty triggers a relaxation response and a release of dopamine, creating a pleasurable feeling.
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