July 5, 2016
Ever consider whether or not you should buy a stock or a house, only to pull the trigger and then have the market fall out from under you? Or ponder your bad investment and finally sell it right before a turn-around? You might feel dumb, but you’re not. As Robert Prechter explained at the London School of Economics, you were simply acting in a context of uncertainty. Uncertainty is an unpleasant state of mind, and the brain’s limbic system demands that we resolve it NOW. So what’s the most comfortable decision when we’re uncertain? Follow what everyone else is doing. In pre-historic days, herding helped us avoid getting mauled by a lion, but today herding can cause real agony in the civilized jungles of the modern world.
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