Dan Ariely, a renowned professor of psychology and behavioral economics, dives into the intricacies of risk and luck amid market shifts. He critiques traditional approaches to risk assessment, advocating for a strategy that aligns financial decisions with personal goals. Ariely also sheds light on the surge in board game popularity, introducing his own game designed to explore human intuition. Meanwhile, market analysts dissect stock movements, highlighting Airbnb's surprising performance and the competitive landscape of Chewy and Amazon in pet supplies.
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volunteer_activism ADVICE
Rethinking Risk Assessment
Don't rely on risk surveys; they are misleading and don't reflect real-life implications of financial risk.
Instead, focus on life goals and calculate the necessary funds, letting risk be a byproduct, not a driver.
insights INSIGHT
Beginner's Luck vs. Skill
New investors who experienced only gains have unrealistic expectations, fueled by luck, not skill.
Recognize the role of luck in investing to avoid chasing returns and potential losses.
volunteer_activism ADVICE
Emotional Control During Downturns
Create a cooling-off period (e.g., one week) during market declines.
This prevents emotional decisions, allowing rational thinking to prevail.
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In this revised and expanded edition of the groundbreaking New York Times bestseller, Dan Ariely uses a series of illuminating experiments to show how expectations, emotions, social norms, and other invisible forces skew our reasoning abilities. Ariely explains how we consistently overpay, underestimate, and procrastinate, and how these behaviors are neither random nor senseless but systematic and predictable. The book covers various aspects of decision-making, from the power of placebos to the effects of social and financial norms, and offers insights into how to make better decisions by understanding these irrational patterns.
The honest truth about dishonesty
Dan Ariely
In 'The (Honest) Truth About Dishonesty', Dan Ariely uses several experiments to investigate the nature of dishonesty. He shows that dishonest behavior is not solely driven by rational cost-benefit calculations but is influenced by psychological factors such as the desire to maintain a positive self-image and the impact of external conditions like fatigue and hunger. Ariely also examines how business practices and social environments can foster or mitigate dishonest behavior. The book provides insights into why people cheat, how often they do it, and the consequences of such actions, while also offering strategies for promoting honesty in everyday life.
The stock market falls as interest rates rise. Airbnb reports a big loss but shares rise on stronger than expected revenue. Home Depot, Lowe’s, and Square slip on growth concerns. Etsy rises on earnings. Papa John’s and Domino’s don’t. Beyond Meat makes two big deals. And Door Dash declines in its debut quarter as a public company. Motley Fool analysts Andy Cross and Ron Gross discuss those stories, weigh in on Amazon and Chewy, and share two stocks on their radar: Curiositystream and ResMed. Plus, Duke Professor of Psychology and Behavioral Economics Dan Ariely talks risk, luck, and how to navigate market declines.
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