Humans’ reactions are contaminated with their cognitive biases, greed, fear, and survival instinct. However, capital market success requires precisely the opposite behavior of what your intuition is suggesting.

Investments are not a lottery; if it feels like the lottery, stay away from it.

Greed and fear are both good and healthy for an investor and capital markets as a whole. Emotions are like fire, beneficial if controlled, destructive if wild.

Individual investors have significant advantages over professional money managers. Retail investors, like you and I, have nobody to report. We have no benchmark to beat and have no fear of capital flight. There are no quarter and year ends, and performance is not linked to calendars.

Traders and investors are humans, full of emotions, behavior biases, and good and bad past experiences. We don’t have much control over psychological shortcomings, and we routinely make decisions contaminated with our emotions and biases.

Market participants are humans, and so are their behaviors.

Somehow, we believe that we have a better chance of winning a game of probabilities, totally disregarding that everybody who is playing the game has the same possibility of winning.

It is a common misconception that if you diversify, you don’t need to learn anything. Just buy a bunch of stocks, and you will be good. Nothing can be further from the truth.

If you have invested an equal amount in Apple and 1,000 other companies at their inception and all other companies go bankrupt, you are still in profit. This is the power of unlimited gain possibilities and limited loss.