Some of the biggest investors on Wall Street are known to be ace poker players. Small investors, he says, often defeat themselves by doing the same things. Dr. Zollman notes that a related cognitive bias, the Dunning-Kruger Effect—which is, essentially, extreme overconfidence—also tends to exist in small-time investors but less so in high-level poker players. To wit, good poker players can sense a bluff; good investors know when an investment pitch is mostly hyperbole. A common trait in successful investors and poker players is an ability to accept regrets.

Source: Wall Street Journal November 04, 2019 03:06 UTC