Why do smart, well intentioned investors still make costly mistakes?
In this episode, I sit down with Barry Ritholtz to explore why investing success has less to do with intelligence and more to do with behavior. Barry explains how bad ideas, bad numbers, and bad habits quietly derail portfolios, even for people who know better.
We talk about how to think probabilistically instead of emotionally, why markets do not crash on a schedule, and what actually brings bull markets to an end. We also dig into the limits of forecasting, how to evaluate market commentary without getting swept up in hype, and where artificial intelligence truly fits into modern investing.
This conversation is not about predicting the next crash or chasing the next trend. It’s about building a decision-making process that works across uncertainty, volatility, and long time horizons.
Key Takeaways
Most investing mistakes come from bad ideas, bad data, or bad behavior, not from lack of access to information.
Good investing decisions should be judged by process, not by short-term outcomes.
Markets do not crash because they are “old” and recessions do not arrive on a calendar. They require a catalyst.
Thinking probabilistically helps investors prepare for a range of outcomes instead of anchoring to a single prediction.
Large language models are powerful tools for efficiency, but they are not replacements for human judgment or original thinking.
Following commentators requires evaluating their incentives, temperament, track record, and consistency, not just their confidence.
Resources
Barry Ritholtz’s Blog
Ritholtz Wealth Management
Barry’s Book – How NOT to Invest
Chapters
Note: Timestamps are approximate and may vary across listening platforms due to dynamically inserted ads.
(0:00) Introduction and why humans struggle with investing
(1:45) Avoiding mistakes without becoming too risk-averse
(3:30) Bad ideas versus good ideas in investing
(6:00) Why outcomes are a poor way to judge decisions
(9:45) Probabilistic thinking and market forecasts
(12:20) Market crashes, risk of ruin, and buying opportunities
(15:00) Why recessions do not happen on a schedule
(18:10) Bull markets, technology, and long-term growth
(19:30) What AI can and cannot do for investors
(24:00) Market archetypes from permabulls to permabears
(27:10) How to evaluate financial commentators
(30:10) Skill, luck, and the halo effect in investing
(32:30) Epistemic trespassing and why expertise doesn’t transfer
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