From Morgan Housel at Collaborative Fund: Greed is expecting more than you deserve given what you’ve put in. Which is exactly what happens when you overestimate your ability to do things that will directly lead to rewards. The first reaction to greed backfiring is to view it as an opportunity. If a novice with no record of success experiences a loss or a failure, they are likely to think they have no skill and no idea what they’re doing. But if you mistakenly think your skill has been confirmed to the point where you’ve become greedy, experiencing a loss is first interpreted as a new opportunity. “Ah, my investment strategy didn’t work but prices are lower now and that’s great.” You will never hear this kind of stuff from someone who hasn’t experienced past success. It only comes from someone who’s convinced that their past actions have caused their past results. When you’ve overestimated how much your actions influence your results, you miss key feedback, sticking to your guns inst...
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