This is an animated video summary of the most important takeaways from Daniel Crosby’s The Behavioral Investor, a 2018 book taking a modern approach behavioral investing.
- To become a great investor, you must learn to suppress your ego, avoid conservatism in your stock pickings, paying more attention to numbers than stories and that no good investments are made under powerful emotional influence - Cope with ego by spreading your money across at least a few different stocks, conservatism by flipping the script and asking, “why not?”, instead of “why?”, attention by playing the odds and emotions by automating and learning to recognize your emotions. - A winning rule-based stock picking system should have empirical support, theoretical support and (some) psychological pain attached to it - Value investing a la Warren Buffett and Benjamin Graham fulfills these criteria - Momentum investing also fulfills all of the criteria for a winning rule-based stock picking system
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3. how to design a winning rule-based system
It will help you avoid:
blown-up ego
paralyzing conservatism
attention issues
emotional roller-coasters
3. how to design a winning rule-based system
It will help you avoid:
blown-up ego
paralyzing conservatism
attention issues
emotional roller-coasters
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