Friday, October 12, 2012

Behavior Gap has some valuable insights


The Behavior Gap is a nice little book on the mistakes we make investing. Much of what is discussed has been researched and mentioned before, but Carl Richards presents it in a fresh way that may sway the views of many retail investors. He uses napkin graphs to present his points. They are available on his website. 

I have presented one here which is simple but illustrative. We engage in the behavior of buying markets when they move to highs because of greed and then we sell at the lows because of fear. When will we learn.

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