Mental models are tools used to explain the process and theory a person uses to understand how something works in the real world. It represents a system of principles that tries to explain the interrelated cause and effect of actions and results. A mental model represents the relation between intuition and reality and beliefs about […]
Mental Models Cheat Sheet Read More »
There are two different methods for reasoning, inductive and deductive. While deductive reasoning looks for certainties, inductive reasoning is used when a circumstance is seen as supplying evidence that a conclusion could be true. The belief in a conclusion based on inductive reasoning is highly probable and based on evidence that can be seen and
Inductive Reasoning Definition Read More »
The Dunning–Kruger effect is a cognitive bias identified in the world of psychology. This effect is identified when people believe their intelligence and knowledge is adequate and correct when in reality they are ignorant and inexperienced in the area they think they are competent in. In reality, they are not only ignorant and blind to
Dunning-Kruger Effect Explained Read More »
Confirmation bias is a psychological filter that causes people to interpret information in a way that proves or at least confirms what they believe is true or what they believe will happen in the future. Confirmation bias is a kind of mental bias and is the wrong way to use reason to arrive at the
The Confirmation Bias Definition Read More »
Warren Buffett has said “I just sit in my office and read all day.” The Omaha World-Herald reported: “Eventually finding and reading productive material became second nature [to Buffett], a habit. As he began his investing career, he would read even more, hitting 600, 750, even 1,000 pages a day.” Warren Buffett says he reads a
Warren Buffett Reading Habits Read More »
Peter Lynch was one of the greatest mutual fund managers of all time for returns over a long period of time. He was the manager of the Fidelity Magellan Fund from 1977 to 1990. During his time managing the fund he averaged a +29.2% return annually. He was able to consistently double the annual returns
Top 10 Peter Lynch Stock Market Quotes Read More »
The Pareto Principle is named after Vilfredo Pareto an Italian economist who first noticed an 80/20 distribution in statistics and published his first work on this in 1896. Pareto is said to have first observed the mathematical formula when he observed about 80% of the total land in Italy was owned by 20% of the people. In his
What is the Pareto Principle? Read More »
Game Theory was originally an idea of John von Neumann based on the strategy and equilibrium in two person zero sum games and its proof was the Brouwer fixed-point theorem which has become a standard method in game theory and mathematical economics. The study and attempt to understand interactions of competing parties using mathematical models to set
What is Game Theory? Read More »
The CAN SLIM Investing System was created by William J. O’Neil after his study of the biggest winning stocks in the history of the stock market going back 130 years. He wanted to systematically quantify the the traits both fundamentally and technically that was the difference between the stocks that created the Alpha in the stock market
Fundamental Analysis of Stocks using CAN SLIM Read More »
The doji candlestick is a chart pattern in technical analysis that is usually formed from a small trading range in a time period where both the open and closing price are nearly equal. A doji candlestick usually signals indecision for a direction in a market. A doji is not very significant inside a range bound market
What is a Doji Candlestick? Read More »
