There are two ways to play the market. You can choose a portfolio manager or pick your own stocks. One is passive, and the other one is active investing. Many investors want to follow in the footsteps of stock-picker success story Warren Buffet and become active investors.
Active investing plays into overconfidence bias. This is when people overestimate the probability of a good outcome. They also underestimate the probability of a bad outcome. Stock pickers assume they’re going to win. But is stock picking the best way to beat the stock market?
