From Thinking in Bets by Annie Duke: Every decision commits us to some course of action that, by definition, eliminates acting on other alternatives. Not placing a bet on something is, itself, a bet … A decision about a stock (buy, don’t buy, sell, hold, not to mention esoteric investment options) involves a choice about the best use of financial resources. Incomplete information and factors outside of our control make all our investment choices uncertain. We evaluate what we can, figure out what we think will maximise our investment money, and execute. Deciding not to invest or not to sell a stock, likewise, is a bet. Admitting we don’t know has an undeservedly bad reputation. Of course, we want to encourage acquiring knowledge, but the first step is in understanding what we don’t know … Once you acknowledge uncertainty it should make you information hungry. When we think probabilistically, we are less likely to use adverse results alone as proof that we made a decision error, beca...
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