I’m working on producing a guide to overcoming irrational investment decisions, because not only do I personally need it but I haven’t found a helpful guide.
Q1 hedge fund letters, conference, scoops etc
One of the main insights I can share with you now is this:
Nobody is exempt from the irresistible effect of emotions on the mind, not even the wisest among us; and to some extent irrationality is a function of the structure of our brains and is hard wired into our very nature by the way we process emotions.
Being irrational is almost beyond our control.
Emotions evolved for a different reason than cognition. These two forms of relating to the world are not connected seamlessly in our brains.
The split between our emotions and our cognition is a source of constant internal friction, comprising of a second emotional self within us that operates beyond our will.
We constantly feel emotions and they continually infect our thinking, making us veer towards thoughts that please us and soothe our egos. It is impossible to not have our inclinations and feelings somehow involved in what we think.
Rational people are aware of this and through introspection and effect are able, to some extent, to subtract emotions from our thinking and counteract their effect.
Please share and like if you found this insight helpful.
Yours in investing
Adam C. Parris
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Article by Adam Parris, Searching For Value
