Friday, 30 July 2010

An idea known as SATISFICING

Satisficing is simply an approach that means we take the best answer we can come up with, given the range of information we have available to us.

Bizarrely the satisficing theories suggests that while a certain amount of information about a certain topic will lead us to improved solutions, beyond this point our decision making accuracy goes down!

If true, it again means there’s a limit to the effectiveness of stock analysis – although that’s still no excuse for simply sticking pins into the price pages of the Financial Times.


http://monevator.com/2010/07/27/behavioural-finance/

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