There's a tendency to look at investments in isolation. Investors focus on the risk of individual securities.

Knowing the importance of luck, you should be particularly suspicious when highly consistent patterns emerge from the comparison of successful and less successful firms. In the presence of randomness, regular patterns can only be mirages.

We can be blind to the obvious, and we are also blind to our blindness.

We are often confident even when we are wrong, and an objective observer is more likely to detect our errors than we are.

The concept of loss aversion is certainly the most significant contribution of psychology to behavioral economics.

The illusion that we understand the past fosters overconfidence in our ability to predict the future.

Policy makers, like most people, normally feel that they already know all the psychology and all the sociology they are likely to need for their decisions. I don't think they are right, but that's the way it is.