A few common threads that I hear these days, that are super interesting,
- $NAME stock is a great buy – typically one of the FANGS or $TSLA
- Bitcoin is going to the moon
- You can never go wrong with real estate
- I am an angel investor (*part-time)
I’ve been reading a lot about behavioral finance and just generally about how our minds work. A few interesting questions pop up.
Stock $x keeps going up, I have a $superficial understanding of their business model. But I am in tech and in silicon valley. So I know best, I must be right. $BUY BUY BUY
Question: What edge do you have over the person who does this a full-time job analyzing equities at a hedge fund/investment bank?
Bias in action: Babe Ruth effect
Bitcoin is going to the moon
Bias in action: Is this just confirmation bias? or barnum effect?
You can never go wrong with real estate.
Question: This is an interesting one. Everybody likes real estate, but very few are willing to quit their jobs and do this full time. if its a good thing, why not go all in?
Bias in action: Is this a variation of the endowment effect? I’ve heard this mostly from folks who own a house (primary real estate).
I am an angel investor (*part time)
Question: Same as the stock analogy. What edge do you have over all the other guys who are doing this full-time? Is this just an ego thing?
Bias in action: Just read this
Or is it just that i’m suffering from bias blind spot? 🙂
Some good books i’ve been reading on this subject.
- Being Wrong: Adventures in the Margin of Error by Kathryn Schulz
- The big list of Biases
- Dollars and Sense: How We Misthink Money and How to Spend Smarter – by Dr. Dan Ariely
- The Collaborative fund blog.