Author: Taking Care Of My Own Business

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

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 situation. Thinking is not something that happens to you.  It’s something that you do about 60,000 to 80,000 times a day. Your brain is like a...

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

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 would be different.”  But sadly the feeling is—the same as before—only temporary. Still, we expect the next car, the next house, or the next promotion to make us happy—even though the last ones didn’t, and even though others keep telling us that...

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Finally an investment idea

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 loyal readers—here is an investment idea that I would like to share. Don’t be disappointed (again) though, because it’s a very long-term investment and isn’t something for those of you who shun a bit...

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Unpredictability Ignorance

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 tips! Not because I am egoistic, or that I am reluctant to share my knowledge, in truth, it’s because of these practical reasons: 1) I neither know their risk tolerance, nor their investment horizon, nor their emotional state, nor their fundamental financial situation, nor… ...

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

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 about next Tuesday don’t make you happy, don’t buy what you impulsively so much desired. 2) The Spillover Effect: Avoid special offers.  Chain stores love to make you feel like you are getting a great deal...

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Wanna be a trillionaire?

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 it.  Abstract numbers, like trillions, really just roll off the tongue with no true meaning in everyday terms. How much is a trillion, anyway? 10 to the power of 12 or quite a lot.  And how many seconds are there in a lifetime?...

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Others are just like me

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 markets?” As Carl Jung said, “Masses are always breeding grounds of psychic epidemics.” Hence, expert investors would answer that question with a ‘No’ and claim that they stray from the herd. That, however, is easier said than done. That said, think carefully for a moment about your sources of...

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

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 more upside than downside from random events (or certain shocks) is antifragile; the reverse is fragile. If antifragility is the property of all those natural (and complex) systems that have survived till now, depriving these systems of volatility, randomness, and stressors...

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The good ol’ gut feeling

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 the cognitive load of making a decision.  But it is not always good at it. Let’s test your intuition with a question that Ludwig Wittgenstein used to pose to his students. You have a ribbon, which you want to tie around the...

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Don’t get framed by …

… 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 learned, while others come free with every copy of the human brain.  This heuristic comes as a freebie and has tricked me so often in the past that I am almost tempted to award it...

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