Overconfidence costs cash Read online It's a new year, so I've revamped my newsletter. You'll find a lesson, example, and resource. It's easy to read yet informative. I hope you like it, let me know what you think. Lesson: Day Traders Lie We've all seen content like this online. It's the first result when I searched "day trading, how i made." It sells the idea that day trading could generate eye-watering riches. But what's the evidence? Researcher Terry Odean secured access to 78,000...

Power of the crowd. Do loud football fans influence referees? Will booing or cheering change an official's decision? In 2002, three researchers decided to find out. The researchers contacted 40 qualified referees and asked them to evaluate all incidents during a Liverpool vs Leicester City match. 20 referees watched the game WITH crowd noise 20 referees watched the game WITHOUT crowd noise It turns out that those who heard the home crowd noise were influenced. They award 15% fewer fouls...

The illusion of effort. Rory Sutherland shares the story of the highly successful Chamberlen family from the 1500s. Chamberlens acquired an extremely good reputation for delivering babies during difficult births — and charged a lot to do so. Their success lay in psychology. When called, the Chamberlens would arrive with an unbelievably heavy box hauled into the birthing chamber. The pregnant woman would have a blanket which covered everything below breast height. She could listen to the...