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Learning that drives better investment decisions

Posts by Alexander Wetterling

Does More Information = More Money?

Information is a central concept in investing. It’s central in the sense that an investor’s informational advantage can be the sole reason he or she makes money in the market, and might even be able to do so continuously. But does more information always equal to more money when investing in stocks?

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How Rational is the Market?

In this post we’ll focus on OUR aggregate rationality, i.e. the aggregate rationality of many individuals, or to word it easier; the market. You’ll discover how we are much smarter together rather than alone. And even though I believe that is true, I will let you know why I don’t think that is the case for stock markets, and why the market is more like a beauty contest.

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How Rational Are YOU?

Traditional financial theory assumes that investors are rational and utility maximizing. In this post I will ask you to choose between different bets and based on that alone, I can tell you more about just how rational you are and the rationality concept behind financial theory.

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5 Behavioral Biases You Should Be Aware of Now

When the markets seem a bit more uncertain than usual, and you are bombarded on all sides with cascades of information about what’s going to happen next; it is important to trust yourself and your own judgment. To achieve this means that you must know yourself; as Benjamin Graham said, “The investor’s chief problem—and even his worst enemy—is likely to be himself.”

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Trading is Still Hazardous to Your Wealth

So you think you are an above-average investor? Svenson (1981) asked Americans and Swedes whether they were above-average drivers. His findings were that more than 90% of Americans and about 70% of Swedes thought of themselves to be more skillful drivers than the average. The impossibility of these perceptions demonstrates the existence of overconfidence bias among humans.

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