Investing for Survival

  Investing for Survival---Behavioral Biases from Capital Spectator

Hubris. This behavioral bias covers a lot of ground, everything from overconfidence (mistaking a bull market for genius, for instance) to hindsight (deciding that yesterday’s uncertainty was predictable after all) to self-attribution (attributing your successes to superior brainpower and any failures to external forces beyond your control). That doesn’t mean we should think of ourselves as dummies who are hopelessly ignorant of the world around us. But there’s a fine line between recognizing how markets price assets through time (and acting accordingly) and deciding that we’re smarter than everyone else.