Learn the why. Not just the what.
Investing fundamentals, market logic, and the discipline behind good decisions.
How Loss Aversion Keeps You in Cash Forever
Cash is comfortable. It does not fluctuate in nominal value. For these reasons, a substantial fraction of investors hold far more cash than any rational analysis would recommend—not as deliberate strategy but as the default outcome of never being willing to accept the discomfort of genuine market exposure.
The Paralysis of 'What If I Lose Everything?'
Catastrophic thinking about investment outcomes is a feature of the anxious investor's psychology that bears examination. It is not entirely irrational—but allowing tail risks to dominate decision-making is disproportionate to their actual probability.
Why You Hold Losing Stocks Too Long and Sell Winners Too Soon
The disposition effect is one of the most reliably documented anomalies in investor behaviour. Investors systematically sell their winning positions too early and hold their losing positions too long—precisely backwards from what produces long-run wealth.
The Fear of Loss That Prevents You From Ever Winning
There is a form of financial paralysis that presents itself as prudence. The investor who keeps the bulk of her savings in cash is not being cautious in any meaningful sense—she is being loss averse in a way that masquerades as caution.
Why Losing $1,000 Feels Worse Than Gaining $1,000
The asymmetry between the pain of losses and the pleasure of gains is among the most robustly documented findings in behavioural economics, and among the most consequential for investment outcomes.
The Hidden Cost of Impatience in Investing
Compounding is among the most counterintuitive phenomena in mathematics, and the gap between its theoretical appreciation and its practical application is one of the most consequential in personal finance.
Short-Term News, Long-Term Damage
The financial news cycle operates on a fundamental mismatch with the time horizon at which most wealth is built. News concerns what is new—what has changed recently. The investor building wealth over decades has almost no use for this kind of information.
Why Checking Your Portfolio Every Day Is Hurting You
The democratisation of financial information has been, in most respects, a genuine advance. Yet the evidence on investor outcomes suggests that more information and easier access have not translated into better decisions. In many cases, the reverse appears to be true.
The Investor Who Panicked and Sold at the Bottom
Every major market decline produces the same pattern. As prices fall, a process begins that has little to do with fundamental economic reality and everything to do with the psychology of collective fear.
Why Smart People Make Dumb Investment Mistakes
Intelligence and investment performance have a weaker relationship than most people suppose, and in some respects an inverse one. Not only do highly intelligent people make the same psychological errors as everyone else, but they often make them with greater conviction and more elaborate justification.
The Trap of 'I Knew It All Along' (Hindsight Bias)
After every major market event, the same remarkable phenomenon occurs. Commentators who failed to predict the crash explain, with great confidence and considerable retrospective detail, exactly why the crash was inevitable.
Why You're Obsessed With Today's Price and Missing the Bigger Picture
A stock's price on any single day tells you almost nothing about what the underlying business is actually worth. Financial economists made peace with this fact decades ago; nobody…
When Confidence Becomes Dangerous in Investing
Confidence is not uniformly virtuous. In most domains of human activity, it broadly correlates with performance. The financial markets are one of the significant exceptions—and the failure to appreciate this is responsible for an enormous amount of wealth destruction.
Why You Think You're a Better Investor Than You Actually Are
There is an odd asymmetry in how people size up their own investing skill. Poll a room of investors on whether they're better than average and most hands go up -- which is…