Commonmentalmistake ( TILSON)
~. Overconfidence
~ Projecting the immediate past into the distant future.
~herd like behaviour ( social proof) , driven by a desire to be part of crowd or an assumption that the crowd is omniscient
~misunderstanding randomness;seeing patterns that don’t exist
~commitment & consistent bias
~Fear of Change, resulting in a strong bias for the status quo
~“Anchoring” on irrelevant data
~Excessive aversion to loss
~using mental accounting to treat some money differently than other money
~.Allowing emotional connection to over ride season
~.fear of uncertainty.
~ Embrace certainty
~. Overestimating the likelihood of certain events based on very memorable data or experience.
~. Becoming paralysed by information overload
~. Failing to act due to an abundance of attractive option
~. Fear of making an incorrect decision & feeling stupid ( regret aversion)
~. Ignoring important data points & Focusing excessively on less important ones ; drawing conclusion from a limited sample size
~. Reluctant to admit mistake
~ Overestimate the degree to which on would have predicted the correct outcome ( hindsight bias)
~. Believing that one investment success is due to wisdom rather than rising market,but failure are not ones fault
~. Failing to accurately assess ones investment Tom horizon
~ Tendency to seek only information that confirm ones opinion or decision
~ Failing to recognise the large cumulative impact of small amount over time
~Forgetting the powerful tendency of regression to the mean
~. Confusing familiarity with knowledge.
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