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We all struggle with being overconfident. We’ve seen the devastating effects of an overconfident leader or politician having to eat crow. Individuals and advisers are no different. Those who are most susceptible are those who are well educated, people who have been successful in their profession, and those who are rich.
It doesn’t matter if you are managing $100 or $100 million, we tend to be overconfident when it comes to investments. We search for research that confirms our viewpoints, and we discount counter-arguments.
In this podcast, Dr. Brad Case, CFA and I discuss the misbehavior of overconfidence and talk about ways to mitigate it.