Investing is the Art of Probabilistic Thinking

Afford Anything | Make Smart Money Choices

Paula Pant | Cumulus Podcast Network

Investing, Entrepreneurship, Business

4.7 • 3.6K Ratings

🗓️ 20 January 2021

⏱️ 59 minutes

🔗️ Recording | iTunes | RSS

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Summary

#296: There’s a lot happening in the market. The Dow is at a new high, there are runaway stocks causing irrational exuberance, and yet, unemployment claims are on the rise. How can this be? To make sense of this, we discuss how improving judgment and using mental models can protect us against risks and short-term thinking. We review one question people rarely ask that might save them from making costly investment mistakes. We then wrap up with a discussion on the so-called death of cities, and what this means for real estate investors. For more information, visit the show notes at https://affordanything.com/episode296 Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	You can afford anything but not everything.
0:10.6	Every choice that you make is a trade-off against something else and that doesn't just
0:13.2	apply to your money.
0:14.2	That applies to your time, to your energy, to your attention, to any limited resource
0:18.8	that you need to manage, saying yes to something implicitly means, saying no to alternatives.
0:25.1	And that opens up two questions.
0:26.8	First, what matters most? Second, how do you align your decision-making to reflect that?
0:32.7	Answering those two questions is the purpose of the Affordable Care Podcast that is why
0:37.8	we exist and it is a daily practice.
0:41.0	The recognition of opportunity cost coupled with decision-making is a lifetime skill.
0:47.8	Something that we strive to be a little bit better at every day.
0:50.8	My name is Paula Pat. I am the host of the Affordable Care Podcast.
0:54.4	Typically, every other week we interview a guest and on the weeks in between myself and
0:59.7	former financial planner Joe Salcihi answer questions that come in from you, the community.
1:05.8	We will return to that format next week but today I wanted to break format and do a solo
1:10.4	episode because there is a lot happening in the market right now.
1:14.3	The Dow is at a new high.
1:16.5	There are some runaway stocks that are causing incredible irrational exuberance given
1:24.3	the very strange state of the market right now along with the cognitive dissonance between
1:32.2	the state of the stock market and the overall economy as well as mounting uncertainty about
1:38.8	the future.
1:40.0	It seemed prudent to take a step back and dedicate a show to thinking clearly and refining
	...

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