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Are you drawing wrong conclusions when investing?
By Dr Wealth  •  October 19, 2011
My boss was explaining to me about mental models. He was saying that we use heuristics to form judgements or make decisions. Heuristics are rules of thumb used to short cut the thinking process. He quoted the example of a kid, whom you pointed out to him what a car looks like. Overtime, based on observation, he would form certain rules like ’4 wheels’, ‘windows’, etc to conclude that an object is a car, even though it is of different shape, make and color. We form such mental models in every area of our lives to aid us in making conclusion faster. If not, we have to spend a lot of time understanding a subject or an object from zero. Ladder of Inference Start from the bottom of this ladder. We pick up certain data that we think are important to aid our decision making. Thereafter we add meaning to ......
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By Dr Wealth
Dr Wealth provides trusted financial education to individuals. We teach researched and actionable investment methods so that our graduates are successful in their investment journey and achieve market-beating returns.
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