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Ep. 342: Victor Ricciardi Interview with Michael Covel on Trend Following Radio

Michael Covel's Trend Following

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The Affect Heuristic and the Emotional Side of Decision Making

A heuristic is typically a cognitive mental process in which we use to make decisions. But then what you do is you combine the emotional part of the break. So for example, if you look at something and you're just kind of looking at the objective aspects of it, and there's no emotional involved. That was the initial underlying assumption of behavioral bias. Then say in the 1990s, they thought to look at the emotional reaction,. And so the affect heuristic is saying, we're looking at the practicality of something or the analytical side but then we look at theotional side.

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