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The Wall Street Journal: The Panic of 2020? Oh, I Made a Ton of Money—and So Did You

So that pundit predicting doom on financial television right now will get to say “I told you so” if the economy collapses. But if things improve, he—and his audience—will end up remembering his forecast as sunnier than it was. “We’re biased to see ourselves in a positive light,” says Deborah Small, a psychologist at the Wharton School at the University of Pennsylvania. “We want to believe that we’re rational and smart. We’ll recall our past actions as more sensible than they were. We also give ourselves too much credit and don’t remember our mistakes as well as we do our successes.” Sure enough, investors looking back on their own decisions often recall more gains and fewer losses than they racked up in reality. Read more on The Wall Street Journal

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