“If you’re relying on your gut rather than a rule-based approach to investing, you can be almost certain that your feelings of risk or safety are exactly the opposite of what they ought to be.”
Source: The Laws of Wealth: Psychology and the secret to investing success
“Get rich fast and get poor fast are opposing sides of the same coin.”
Source: The Laws of Wealth: Psychology and the secret to investing success
“Intuition is the silent coming together of a lifetime of learning and must be cultivated if it is to be useful.”
Source: The Behavioral Investor: How psychology shapes wealth, risk, and investment decisions
“The behavioral investor understands and seeks to mimic the best parts of passive investing - low turnover, rock bottom fees and appropriate diversification - without succumbing to absentminded buying and selling.”
Source: The Behavioral Investor: How psychology shapes wealth, risk, and investment decisions
“This book could have easily been three words long: automate, automate, automate. It likely wouldn't have sold well, and you might have ignored the advice on account of it seeming too simple, but the fact is that many of the thornier elements of emotion can be done away with entirely by slavishly following a system of investment rules in all types of market weather.”
Source: The Behavioral Investor: How psychology shapes wealth, risk, and investment decisions
“Being a behavioral investor is less about adhering to some textbook notion of rationality and more about understanding and bending the idiosyncrasies of human nature to our advantage.”
Source: The Behavioral Investor: How psychology shapes wealth, risk, and investment decisions
“For a factor to be worthwhile to a behavioral investor it must be empirically supported, theoretically sound and behaviorally intransigent.”
Source: The Behavioral Investor: How psychology shapes wealth, risk, and investment decisions
“One of the things that makes adhering to probabilities so difficult (and profitable) for an investor is that emotion has a pronounced impact on how we assess probability. Predictably, positive emotion leads us to overstate the likelihood of positive occurrences and negative emotion does just the opposite. This coloring of probability leads us to misapprehend risk… All too often we confuse the intensity of our longing with the probability of our winning.”
Source: The Behavioral Investor: How psychology shapes wealth, risk, and investment decisions
“But the paradox in owning our personal mediocrity is that it makes us, in the strictest sense of the word, exceptional. It is not about believing in yourself - in fact, it’s quite the opposite. It’s about realizing that the less you need to be special, the more special you’ll become… Exceptional investment outcomes are attainable by all of us, if we just stop trying so hard.”
Source: The Behavioral Investor: How psychology shapes wealth, risk, and investment decisions
“Far from seamlessly assimilating new ideas into our existing belief framework, research shows that we actually tend to get more firm in our cherished beliefs when those beliefs become challenged.”
Source: The Behavioral Investor: How psychology shapes wealth, risk, and investment decisions