Behavioral Finance Articles of Interest

I found both of these articles very compelling and a way that I link to consider the investing environment.

Behavioral Finance - RSA Fellowship Journal

This one is a little less directed at Finance and more about confidence and cognitive thinking.  Look at this excerpt:

" The confidence we experience as we make a judgment is not a reasoned evaluation of the probability that it is right. Confidence is a feeling, one determined mostly by the coherence of the story and by the ease with which it comes to mind, even when the evidence for the story is sparse and unreliable. The bias toward coherence favors overconfidence. An individual who expresses high confidence probably has a good story, which may or may not be true."

The Hazards of Confidence in Leadership and Picking Stocks

Lots of good stuff later in the article about how when stock pickers sell one stock to buy another, that the one they sold tends to outperform on an average of 3.3%.