I am off to Toronto, where I am presenting at the annual CFA forecasting dinner. (I am the counter-programming, which means I get to explain why you humans are so bad at forecasting.

From Morgan Housel, here are several cognitive biases that cause you to do dumb things with your money. Be sure to check out the entire article.

15 Biases That Make You Do Dumb Things With Your Money
1. Normalcy bias
2. Dunning-Kruger effect
3. Attentional bias
4. Bandwagon effect
5. Impact bias
6. Frequency illusion
7. Clustering illusion
8. Status quo bias
9. Belief bias
10. Curse of knowledge
11. Gambler’s fallacy
12. Extreme discounting
13. Ludic fallacy
14. Restraint bias
15. Bias bias

I like Nobel Prize winning cognitive psychologist Daniel Kahneman’s take on this: He once said, “I never felt I was studying the stupidity of mankind in the third person. I always felt I was studying my own mistakes.”



15 Biases That Make You Do Dumb Things With Your Money
Morgan Housel
Motely Fool, August 30, 2013   

Category: Cognitive Foibles, Psychology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

2 Responses to “15 Biases That Make You A Dumb Investor”

  1. czyz99 says:

    That’s gold, Barry! Gold!

  2. formerlawyer says:

    Barry travelling – check
    Federal government shut down – check
    Looming default – check

    Anything else?