A baseball batter cannot hit a home run every at-bat. You might make a lot of money once with luck, but that’s a fleeting way to earn. If you generate a lot of money without even preparing a bowl, you might end up unhappy. The reason for emphasizing the ‘compound effect’ in investing is because it’s one of the few sustainable methods mankind has experienced. However, compared to our greed, ‘compound interest’ seems like a small rate of return right now, so many people break the rules they need to follow and take risky investments, putting themselves in danger. We can’t hit a home run every day. Valuing small profits and working to protect them will bring us good fortune. Greed leads to destruction. - Joseph’s “just my thoughts”
The Anchoring Heuristic In 1974, Tversky and Kahneman divided two groups and asked one group to calculate the value of "8x7x6x5x4x3x2x1" and the other group to answer the question "1x2x3x4x5x6x7x8" immediately. The average calculation result of the first group was 2,250, and that of the second group was 512. For both groups, the original answer is 40,320, which is the same. Although they multiplied by the same number, the first group multiplied by the order of the larger number, resulting in a higher baseline adjustment, while the second group did the opposite. When we judge and make decisions, the reference point determines the extent and direction of our illusion. When we live, we have to deal with these fallible human beings. - Joseph's "just my thoughts"