This podcast episode explores the Dunning-Kruger Effect, a cognitive bias that leads people to overestimate their abilities. This effect is particularly pronounced when individuals lack expertise in a specific area, making it difficult for them to recognize their own lack of knowledge. To mitigate the Dunning-Kruger Effect, it is crucial to seek feedback from others, be aware of one's own biases, and continuously strive to learn and develop one's skills. By embracing these strategies, investors can avoid overconfidence and make more informed decision-making.
