Chapter 8 · Risk, portfolio and taxes
The part that is about you
The predictable ways your own judgement will work against you.
Every framework on this site assumes a decision-maker who evaluates evidence consistently. You are not that, and neither is anyone else. Knowing the specific ways this fails is more useful than any indicator.
- Losses hurt more than equivalent gains please. So people hold losers hoping to break even, and sell winners early to lock in feeling right.
- You will seek out agreement. Once you own something, contrary information becomes easier to dismiss.
- Recent events feel more likely to repeat than distant ones, regardless of the actual odds.
- A crowd feels like evidence. In a market the size of Nepal's, it often just means everyone read the same message.
- Confidence rises after wins — exactly when position sizes should not.
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