you are not built to be happy or to make good investment choices, you are built to survive and reproduce. Asking someone built for short-term survival to become a long-term investor is a bit like trying to paint a room with a hammer. You can do it, but it’s not pretty.

The gentleman, after a brief thanks for the presentation, asked for my opinion of Apple stock as it made up a large portion of his $2 million portfolio. Now, I held the stock in my separate account strategies at the time and it was the highest rated stock in my investable universe at that very moment; I could not have been more bullish on Apple.

Taleb believed there to be an asymmetry between the size of losses and gains that might occur. Although there was a greater likelihood that the market would rise (as is almost always the case), the repercussions of a falling market, however unlikely, were much more dramatic. Thus, he operated from his best estimate of expected value and not just

“If you don’t know who you are, Wall Street is an expensive place to find out.” — Adam Smith, The Money Game

Learning to score your investment wins and losses based on the quality of your decisions and not on the quality of the outcome is the key to managing your emotions, appropriately measuring your own performance and living to fight another day.

The very process of trying to define a gold standard can result in its bastardization. It has been said that “what gets measured gets done,” but it is equally true that “what gets measured gets dumb.”

Equity investing activates our “story brain” in the direction of both greed and fear because there are salient examples throughout history of both great wealth creation and wealth destruction. But risk, real risk, is the probability of permanent loss, not the bumps and bruises along the way.

In simple terms, we rationally evaluate things that do not intersect with our worldview and emotionally evaluate those that do, as part of our ongoing effort to maintain a belief in our own “rightness.”

It is heartening to think of the sort of noble people we would be if we adhered to the expectations of neoclassical economic theory. We would make prudent nutritional choices that nurtured our long-term health. We would ignore the daily ups and downs of the stock market in favor of a longer-term view aligned with our personal goals and needs. And