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Investing During a Pandemic: A Tale of Two Investors

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.” ― Charles Dickens The above quote is the first sentence of the Charles Dickens masterpiece:  A Tale of Two Cities.  There may not be a better quote to describe the volatility of the stock market and the emotional toll on investors. We know from studies of investor behavior that many tend to buy stocks during the spring of hope, and sell during the winter of despair. They buy high and sell low which results in poor long term returns. This is a natural, emotional response. When markets go down, the fight or flight part...

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Investing Is Like Poker, Not Chess

Investing is like Chess, not Poker.

The former World Series of Poker champion, and now corporate consultant, Annie Duke, has written a wonderful book on decision making titled “Thinking in Bets, Making Smarter Decisions When You Don’t Have All The Facts.” The book opens with a story that many football fans have said is the worst play call in Super Bowl history. For those that may not remember, the Seattle Seahawks were down by 4 points with 26 seconds left in the game with the ball on the one-yard line. The head coach of the Seattle Seahawks, Pete Carroll, called a pass play instead of handing off the ball to one of the best running backs in the NFL. The pass was intercepted and the New England Patriots won the Super Bowl. When the details of the situation are clearly discussed in the book -- the number of downs and time outs left, along with the fact that not one of the sixty-six passes attempted from the one-yard line...

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