All the participants [in a study by researchers from California Institute of Technology, New York University and the University of Iowa] played a game in which they sampled four slot machines. They were free to play whichever machine they thought would give the biggest payoff. What they didn’t know was that the payoffs from each machine varied unpredictably.
The neuroscientists found that the two control groups tended to make their next bet based largely on how much a slot machine had paid off on the two most recent bets….
via Why Your Brain is Killing Your Portfolio – WSJ.com.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.