An interesting week we are going through right now. The stock markets are finally providing a bit more entertainment value. Giving us a good test on another (nasty) bias that makes us do dumb things with our money: Illusion of skills.
All of us have limited access to the workings of our minds and as a result, we know less about ourselves than we feel we do; still, we are not the only ones that might be suffering from this.
An entire industry that largely appears to be built on the illusion of skills is the Investment Industry; particularly, those self-proclaimed “stock-picking-experts”.
Often, millions of shares of a single stock change hands in a day and most of the buyers and sellers know that they have the same information; nevertheless, the primary reason for their exchange of stocks is due to their difference in opinion:
The buyers think that the price is too low and likely to …