How your cognitive biases lead to terrible investing behaviors | Barry Ritholtz: Full Interview

In this monologue podcast, Barry Ritholtz discusses key concepts from his book, "How Not to Invest," focusing on the behavioral and cognitive biases that lead to poor investment decisions. He explains how our brains, evolved for survival, often mislead us in modern financial markets. Ritholtz covers various biases, including the limbic system's influence, narrative fallacy, confirmation bias, herd mentality, loss aversion, anchoring, political bias, and the recency effect. He advocates for a long-term, unemotional, and diversified investment approach, emphasizing the importance of avoiding common errors and understanding the media's role in shaping investor behavior. Ritholtz also touches on the "Loser's Game" concept, highlighting the difficulty of outperforming the market and advising listeners to automate their investments, minimize costs, and be wary of social media financial advice.