Humans are evolutionary hardwired to seek safety in numbers. In the stock market, this leads to disastrous bubbles and crashes. Investors flock to sectors simply because "everyone else is making money there" (e.g., the dot-com bubble of 2000, or various tech and crypto crazies in recent history). Parikh emphasizes that by the time the crowd arrives, the smart money is already leaving. 4. Overconfidence Bias
Accept that you cannot predict macroeconomic shifts, interest rate changes, or short-term market movements. Focus entirely on understanding individual companies. Humans are evolutionary hardwired to seek safety in numbers