Most Frequent Market Biase

November 4, 2012 — 1 Comment
  1. Confirmation bias – hearing what we want to hear.
  2. Overly optimistic – majority of humans are optimists. Like Andy Grove (Intel CEO) said, only the paranoid and skeptic survive.
  3. Dislike of losses – people hate losing. Period. And when the majority of people face a loss, they become paralyzed – a good investor would never do such a thing.
  4. Crowd mentality – humans have a tendency to follow the crowd. Never do that, especially in a bear market when only contrarian investors make money.
  5. Recent memory – the average person’s memory is short lived. This is very fatal in the markets.

One response to Most Frequent Market Biase

  1. Crowd mentality can be really dangerous. It’s true for stocks, real estate, or other financial markets, everything may seem to be going well but all it takes is one catalyst to completely change the nature of a trend.

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