How Investors Cope With Radical Uncertainty

How heuristics, filters and reasonable stories help us cope with radical uncertainty and make investment decisions. Thanks to Netsuite and The Great Courses Plus for sponsoring the episode.

[0:17] Investing is a world of radical uncertainty.[1:57] Risk vs. uncertainty.[6:01] Coping through the use of narrative.[10:39] Using filters to keep ourselves from being overwhelmed.[12:48] Staying shy of the consensus and “phantastic” objects.[16:04] Learning to tell ourselves reasonable stories.[17:01] Re-defining what makes a great decision.[20:52] Each individual’s decisions influence the future economy.[23:42] Investors aren’t alone: banks need coping mechanisms too.