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In this animated video summary, I will present the top 5 takeaways (for investors!) from the psychological biases presented in Daniel Kahneman’s Thinking Fast and Slow.

Part 2 of Thinking Fast and Slow: http://bit.ly/2SiFPhQ

Top 5 takeaways from Thinking Fast and Slow:
00:00 Intro
00:54 1. Fast and slow thinking - System 1 & 2 introduced
03:03 2. The priming effect
05:59 3. The anchoring effect
08:18 4. The framing effect
11:32 5. Cognitive ease/substitution

TL;DW:
- Humans have two decision making systems, and problems start to occur when system 1 is used in a system 2 situation (or the other way around)
- Avoid being a victim of priming (in the stock market) by establishing a system with predefined criteria for buying and selling stocks. Don’t let your surroundings influence you too much.
- Stocks are NOT cheap just because they have gone down in price – it’s only the anchoring effect that makes us believe so
- How you frame something can make a huge difference on how the message is perceived. A number presented without its proper context may be quite misleading.
- Because of cognitive ease, we tend to substitute some difficult questions for simpler ones. “Invest in company A?” becomes “Do I like company A?”.

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