Friday, September 11, 2009

J. Zweig And Taleb on Investor behavior


I found this on TheGuruInvestor.com. 
This was interesting because the first guy talks about our cognitive handicap in seeing patterns (Taleb talks about this quite a bit in the black swan)  I did find it funny when he mentions that when we see two events in an upward or downward direction we cannot help but predict a trend. So perhaps our ability to subconsciously discern patterns is working against us. For instance our ability to predict the trajectory of a ball thrown in the air is a consequence of some form of pattern/prediction mechanism going on.  This same desire to see patterns may strongly drive other behaviors that this auto-prediction ability is not suited for.


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