Why do I blog so much about the brain, biases and thinking errors in context with money and investing?

I am very glad that more and more of you are stopping by the Tacomob-website and I feel specially encouraged by all your positive E-mails. One of the more frequent questions asked has formed the header to this post and there are dozens of answers to it. Here are a few: Because you who reads my blog already know that investing for the long-term is the best thing that you can do with your … [Read more...]

ad verecundiam

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Have you noticed that we are social creatures who devote a lot of our time to thinking about social ranking? And that a by-product of this obsession is a tendency to blindly trust the claims and ideas of people who rank above us? Perceptions of authority and superiority impress us, they also influence us—whether they are valid or not. Do people in authority in one field, however, have an … [Read more...]

NOW

I realise now that NOW is the only time that exists, although that truth about time took me a while to comprehend. Our life, you see, is about a series of moments in time, but we often live these moments hoping to improve a future moment—to have a better job, to make more money, to be important, to be happy- instead of just enjoying them. I had that plan. But the fact is that this … [Read more...]

Do you want to predict the future?

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I beg your pardon? Did you just answer with a Yes? That is great, because that proves that you are human and/or a human being. Did you know that the human being is the only animal that thinks about the future? We—human beings—think about the future in a way that no other animal can, does, or even has, and this simple ordinary act is a defining feature of our humanity. Our human … [Read more...]

Extreme Discounting

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When we are presented with distant commitments, we tend to stumble on the difficulty that our brain has in placing us in the future with any degree of accuracy. Why is that? Because our brain evolved to make determinations about our existing environments and to predict immediate threats and rewards, it’s a stretch to gain perspective even a few weeks into the future. Our brain is … [Read more...]

Book: ‘Mind Power’ by James Borg – Key Statements

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Chapter 1: You are What You Think “You are today where the thoughts of yesterday have brought you and you will be tomorrow where the thoughts of today take you.” — Blaise Pascal We can’t change other people and our particular life situation.  At least we can do things within our control.  We can use mind power—we can change the way we think, which in turn changes the way we feel about a … [Read more...]

This-time-is-different-bias or why we don’t learn from our mistakes

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Did you know that it is the default settings of our brain that often drive us—despite past experiences—to do things that make no logical sense, though they make perfect emotional sense? That, however, does not make us completely irrational; it makes us human. As consumers, for example, we routinely escalate our purchases, hoping that new stuff would make us happier because “This time it … [Read more...]

Finally an investment idea

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Some of you have contacted me (although commenting on my blog posts would be an alternative way, besides e-mail, to communicate with me) and shared your disappointment that I have yet to share an investment tip on Tacomob. There is reason for that and I have shared it here. I hear you (despite my hearing deteriorating—at least that’s what my wife claims) and as I am here to please—you my … [Read more...]

Unpredictability Ignorance

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It’s not so easy to be active in the stock market. Because when people I meet learn that I make my money predominantly from the abundant stock market, they—more often than not—flood me with questions on my prediction of the future trends and also, to share one ‘hot tip’. I have to say that the latter—the sharing of the one ‘hot tip’—is easier to comply: I simply don’t give out … [Read more...]

Employ your brain to save money, or 10.5 safe ways to safely save you money

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1) Next Tuesday: Before a purchase, take the time to consider what you’ll be doing, from morning to night, this coming Tuesday.  How will this purchase affect you on Tuesday? This simple exercise—thinking about time used on a specific day (you can choose your favourite weekday)—helps us make less biased predictions about how much any one thing will influence our happiness. If those thoughts … [Read more...]

Wanna be a trillionaire?

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Sounds great, doesn’t it? And you would be the first on this planet, provided that you measure your wealth in the current USD, since I am quite certain that there would already be existent trillionaires when measured in Vietnamese Dong or Indonesian Rupiah. Trillions are flung around in the news nowadays to keep us informed or to scare us off.  Are they successful in that?  I sincerely doubt … [Read more...]

Others are just like me

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We have the tendency to overestimate the degree to which others agree with us; therein making this—tendency—just another of those predictable patterns of thought and behavior that lead us to draw incorrect conclusions. Psychologists call this the False Consensus Bias. Let me ask you: “Is agreeing with the masses the best course of action when it comes to investing in the stock … [Read more...]

Book: ‘Antifragile’ by Nassim Nicholas Taleb – Key Statements

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Wind extinguishes a candle and energizes fire. Likewise with randomness, uncertainty, chaos: you want to use them, not hide from them.  Some things are fragile—they don’t like chaos, while others are robust—they don’t care if things are crazy. Antifragility is beyond resilience or robustness.  Antifragile things get better and stronger when the world is falling apart.  Everything that has … [Read more...]

The good ol’ gut feeling

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We sometimes tend to think that ideas and feelings arising from our intuition are essentially superior to those achieved by reason and logic. As such, intuition—the good old “gut feeling”—has come to be idealized as the Noble Savage of the mind, fearlessly cutting through the precision of reason. In truth, intuition is just another heuristic of our brain honed—over millions of years—to ease … [Read more...]

Don’t get framed by …

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… the Framing Bias. This is another beautiful mental shortcut that we use to solve common problems. Although this heuristic speeds up processing in our brain, it occassionally makes us think so fast that we miss what is important. When heuristics work, they help our brain stay frugal, but when they don’t, we see the world as a much simpler place than it really is. Some heuristics are … [Read more...]