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This page contains all of the posts and discussion on MemeStreams referencing the following web page: Top 10 Investor Errors: Cognitive Deficits | The Big Picture. You can find discussions on MemeStreams as you surf the web, even if you aren't a MemeStreams member, using the Threads Bookmarklet.

Top 10 Investor Errors: Cognitive Deficits | The Big Picture
by Decius at 11:31 am EDT, Jul 7, 2012

• We see patterns where none exist.

• We have difficulty conceptualizing long arcs of time.

• We selectively perceive what agrees with our pre-existing expectations, and ignore things that disagree with our beliefs.

• We tend to forget our losers and over-emphasize our winners.

• Our inherent optimism bias turns out to be hard-wired as well — our brains are better at processing good news about the future than bad.

• We actually get a greater thrill from the anticipation of a financial reward than the actual reward itself. (Think what this means in terms of Buy the Rumor, Sell the News)

• We seek stimulus for the dopamine high — regardless of how. Whether you are a Gambler, Alcoholic, Sex Addict, Shopaholic, or Hyper-Active Trader — its all the same buzz.

• Story-telling is how Humans evolved to share information (Pre-writing). Thus, we are vulnerable to anecdotes that mislead or present false conclusions unsupported by data.


 
 
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