This article presents a practitioner’s definition of Quality. We make the case that both the research that identify quality as a promising factor or find that quality does not result in superior returns are misguided.
Using examples from vacations to colonoscopies, Nobel laureate and founder of behavioral economics Daniel Kahneman reveals how our “experiencing selves” and our “remembering selves” perceive happiness differently. This new insight has profound implications for economics, public policy — and our own self-awareness.
Bounded Rationality refers to the idea that our rationality is limited by the information we have, the cognitive limitations of our minds and the finite amount of time we have to make a decision. However, investment professionals seem to disregard the bounded rationality of our minds and tend to be overconfident in their abilities. In this article, we discuss the implications of this phenomenon and how investors can overcome it.