Unfortunately, skill in evaluating the business prospects of a firm is not sufficient for successful stock trading, where the key question is whether the information about the firm is already incorporated in the price of the stock. Traders apparently lackthe skill to answer this crucial question, but they appear to be ignorant of their ignorance.
Daniel KahnemanIf people do not know what is going to make them better off or give them pleasure, then the idea that you can trust people to do what will give them pleasure becomes questionable.
Daniel KahnemanResearchers who studied a thousand Dutch vacationers concluded that by far the greatest amount of happiness extracted from the vacation is derived from the anticipation period.
Daniel KahnemanIntuitive diagnosis is reliable when people have a lot of relevant feedback. But people are very often willing to make intuitive diagnoses even when they're very likely to be wrong.
Daniel KahnemanHowever, optimism is highly valued, socially and in the market; people and firms reward the providers of dangerously misleading information more than they reward truth tellers. One of the lessons of the financial crisis that led to the Great Recession is that there are periods in which competition, among experts and among organizations, creates powerful forces that favor a collective blindness to risk and uncertainty.
Daniel Kahneman