Course
The Investor’s Mind
The documented ways investors fool themselves — and the working countermeasures.
Beginner6 lessonsabout 39 minContent checked
The evidence on how investors actually decide. Selling winners and keeping losers, ignoring base rates, judging decisions by their outcomes, trading on overconfidence, mistaking confidence for calibration, and the stories that decide what evidence you go looking for. Each lesson ends on a countermeasure you can practise inside Pythia.
Module 1 — the Classic Traps
- 1. The disposition effect — selling winners, keeping losersIndividual investors sell their gains and hold their losses, at a rate too large to be chance and in the direction that costs them money. It is the best-measured mistake in retail investing.7 min
- 2. Base rates and the outside viewBefore asking what makes this company special, ask what usually happens to companies like it. The outside view is the cheapest correction available to an investor.7 min
- 3. Judging the decision, not the resultA good outcome does not prove a good decision, and one bad quarter does not refute a thesis. In a domain this noisy, the only thing you can actually improve is the process.6 min
Module 2 — Knowing Yourself
- 4. Overconfidence, and what it costs in tradingInvestors who are more certain trade more, and trading more is reliably associated with worse net returns. The clearest evidence in behavioural finance is about activity, not stock-picking.6 min
- 5. Calibration — being right about how right you areA forecaster is calibrated when the things they call 70% likely happen about 70% of the time. It is measurable, it is trainable, and it is a different skill from being smart.7 min
- 6. Stories, and the evidence you go looking forA coherent story raises confidence more than evidence raises accuracy, and once you hold a view you search asymmetrically. Both are cheap to correct if you know the shape of them.6 min