TLDR? Competence is not only about ability, but also about what you can recognize in yourself. Experts tend to underestimate themselves, amateurs overestimate themselves. Understanding how it affects us and how we can apply this to personal finance allows us to stay grounded.
Hey everyone, I hope you enjoyed our post last week on portfolio variance, what the components are, and how one can go about constructing said portfolio. I hope there were some lessons in there about how your portfolio behaves; as well as how we can think about how our life stage affects our investing considerations.
Today, we’re going to talk about a very interesting topic. That topic is why competent people downplay their competence, and why incompetent people play up their competence. When I first came into contact with this topic, it was endlessly interesting and entertaining to me. I noted with no small amount of bemusement,