Chapter 8 | Illusion Of Control Bias

Question 1

is the tendency of investors to believe that they have a certain degree of control over the outcomes of investment markets! Not all investors believe that they have complete control. However, a lot of them do believe that they have some influence over the market.

Answer 1

Illusion of control bias

Question 2

Tendency for people to believe that they have more control over things than they really do.

Answer 2

Illusion of Control Bias

Question 3

This leads us to overestimate our odds of succeeding or getting a positive outcome and invent explanations linking our behavior to some results.

“Mentally Thinking”

Answer 3

Illusion of Control Bias

Question 4

Reasons why illusion of Control Bias occurs

Answer 4

Desire to Control
Bias towards possibility
Casualty vs. Correlation

Question 5

ADVICE

Answer 5

Recognize that successful investing is a probabilistic activity

Recognize and avoid circumstances that trigger susceptibility of illusion of control.

Seek contrary of viewpoints.

Maintain record of your transaction.