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We Study Billionaires - The Investor’s Podcast Network cover image

TIP554: Mental Models for Successful Investing w/ John Jennings

We Study Billionaires - The Investor’s Podcast Network

NOTE

The Interplay of Overconfidence and Loss Aversion in Investing

Overconfidence in investing means that we believe we know more than we do or make better decisions than others./nLoss aversion states that losses feel more painful than gains feel good, causing us to double down on our losses./nOverconfidence and loss aversion can go hand in hand, leading to risk seeking behavior and poor decision-making in investing./nInvestors should recognize their limitations and learn from their losses to improve their investment decisions.

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