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(note that even institutional investors seem to have a neocortex).

Markets become inefficient when one of these conditions is violated, and the most likely condition is almost always lack of diversity. We are social animals. Instead of believing different things, we correlate our beliefs.

€100,000 less than he was offered thirty seconds before. The irony is that this offer is utterly fair; Frank would be wise to cut his losses and accept the Banker's proposal. But Frank immediately rejects the deal; he doesn't even pause to consider it. After another unlucky round, the Banker takes pity on Frank and makes him an offer that's about 1

The economists Ulrike Malmendier and Geoffrey Tate identified optimistic CEOs by the amount of company stock that they owned personally and observed that highly optimistic leaders took excessive risks.

Avoid availability bias by asking, “Is this expenditure likely to result in a sustainable rise in economic earnings in the future?”

it’s not the person who makes the best decisions who comes out ahead, it’s the person who makes the most decisions.

Nobel Prize winner Daniel Kahneman indicates that on average, we are twice as loss-averse compared to seeking a gain209

Latané called his approach to portfolio design the geometric mean criterion. He demonstrated that it is a myopic strategy. A “near-sighted” strategy sounds like a bad thing, but as economists use it, it’s good. It means that you don’t have to have a crystal ball on what the market is going to do in the future in order to make good decisions now. Th