Mark Matson

Therefore, only random or unpredictable events change prices going forward.

The second is that the returns come from the cost of capital, meaning that every stock has a cost of capital, a risk, a number of raising money that is the equivalent to the return to the investor.

And then you've got to broadly diversify globally to reduce the risk long-term.

Well, in the book, I talk about the fact that the human brain is not situated very well for investing.

You know, you don't go back 5,000 years ago and find a pie chart and a standard deviation on the wall of a cave somewhere.

This is relatively new for human beings in the last couple hundred years.

And there's all kinds of problems with the human brain.

One is familiarity bias.

We like to invest and buy stocks that we're familiar with.

Hindsight bias.

We say, oh wow, look how great Nvidia did over the last 10 years.

Well, yeah, but that's hindsight.

You don't get to go back in a time machine and buy it right before it did its performance.

FOMO, fear of missing out.

We want to chase what's hot.

We want to chase what other people are buying.

Hurting bias.

If your neighbors are doing it, if they're talking about it on TV, hurting is great for Zebra, terrible for investors.

And then, of course, you have instincts and emotions.

Emotionally, we're very excited when things go up.