Monday, April 1, 2013

14 points to live your investment life by!

These biases apply to me, you and everyone else as well.

Be less certain in your views, especially if they are forecasts.

You know less than you think you do.

Try to focus on the facts, not the stories.

More information isn’t better information.

Listen to those who disagree with you.

Examine your mistakes, failures aren’t just bad luck.

You didn’t know it all along, you just think you did.

Judge things by how statistically likely they are, not how they appear.

Big, vivid, easy to recall events are less likely than you think they are.

Don’t confuse good firms with good investments or good earnings growth with good returns.

Use reverse-engineered models to avoid anchoring on the market prices.

Don’t take information at face value; think carefully about how it was presented to you.

Sell your losers and ride your winners.
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