{"id":728794,"date":"2020-07-19T06:30:48","date_gmt":"2020-07-19T06:30:48","guid":{"rendered":"https:\/\/stockviz.biz\/index.php\/2020\/07\/19\/is-it-rational-to-be-irrational\/"},"modified":"2021-09-14T08:46:42","modified_gmt":"2021-09-14T03:16:42","slug":"is-it-rational-to-be-irrational","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2020\/07\/19\/is-it-rational-to-be-irrational\/","title":{"rendered":"Is it rational to be irrational?"},"content":{"rendered":"\n

Not losing is winning.<\/h2>\n\n\n\n

\u201cTake the probability of loss times the amount of possible loss from the probability of gain times the amount of possible gain. That is what we’re trying to do.\u201d – Charlie Munger<\/p><\/blockquote>\n\n\n\n

In 2002, Daniel Kahneman won the Nobel prize in economics for his groundbreaking work in applying psychological insights to economic theory, particularly in the areas of judgment and decision-making under uncertainty. In 2017, the Nobel prize in economics went to his long-time collaborator, Richard Thaler, for exploring the biases and cognitive shortcuts that affect how people absorb and process information. Their books, Nudge, Misbehaving, Thinking, Fast and Slow, went on to become best sellers and hugely influential.<\/p>\n\n\n\n

When it comes to investing, their biggest observation is that people prefer to avoid losing compared to gaining the equivalent amount.<\/p>\n\n\n

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