I stumble upon an interesting article with the above title. It said that:
"The human brain is inherently bad at dealing with probabilities. This is largely evident in the field of investing where investors try to handicap companies as potential investments, especially in the face of uncertainty. Investors should strive to improve their cognition of probabilities and operate with a frame of mind that helps to compensate for our wiring at birth. As well, investors need to avoid information overload, a few key variables is all one needs to handicap the odds of an investment’s success or failure."
.....
"Most investors strive fruitlessly for certainty and precision, avoiding situations in which information is difficult to obtain. Yet high uncertainty is frequently accompanied by low prices. By the time the uncertainty is resolved, prices are likely to have risen. Investors frequently benefit from making investment decisions with less than perfect knowledge and are well rewarded for bearing the risk of uncertainty. The time other investors spend delving into the last unanswered detail may cost them the chance to buy in at prices so low that they offer a margin of safety despite the incomplete information." Margin of Safety, Seth Klarman"
Read the full article HERE or http://www.gurufocus.com/news.php?id=13090
In an Uncertain World: Tough Choices from Wall Street to Washington
Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
Understanding and Calculating the Odds: Probability Theory Basics and Calculus Guide for Beginners, with Applications in Games of Chance and Everyday Life
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