CHAPTER 13UNDERSTANDING THE WAY YOU THINK
Much success can be attributed to inactivity. Mostinvestors cannot resist the temptation to constantlybuy and sell.
—WARREN BUFFETT
Over the years, the practice of understanding behavioral finance has become increasingly popular because of the volatility of the market and the desire of investors to better understand how to make profitable decisions. As a result, we are now trying to understand why the market behaves in certain ways and what minor changes can be made to help investors return larger gains. The principle behind behavioral finance is to change the way you think by identifying certain behaviors and then changing them and then also to identify market behaviors that create value. Unfortunately, ...
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