Welcome to the sixth part of this series which is based on the book “The Art of Thinking Clearly” by Rolf Dobelli.
We aim to highlight a list of biases, fallacies and illusions that impair judgement and impede good decision-making.
You can refer to parts one through five in the links below.
Part 1 – click HERE
Part 2 – click HERE
Part 3 – click HERE
Part 4 – click HERE
Part 5 – click HERE
Meanwhile, let’s explore yet another three conditions which negatively affect our thinking process.
False causality
False causality describes a situation where causation is attributed to an outcome even though other factors may have been at play.
Investors make this common error when they assume that certain actions or events trigger share price reactions.
However, due to the randomness present in the world, many outcomes could have been a result of influences other than the reasons that the investor had assumed.
It is dangerous for an investor to be overly reliant on causality....