Believing everything you read
We all appear to be hardwired to accept stories at face value. However, stories can be very misleading. Investors would be better served by looking at the facts, rather than getting sucked into a great (but often hollow) tale.
We all love a story. Stock brokers spin stories which act like sirens drawing investors onto the rocks. More often than not these stories hold out the hope of growth, and investors find the allure of growth almost irresistible. The only snag is that all too often that growth fails to materialise.
In a rational world, we gather evidence, weight it and then decide. However, people rely on stories instead. We gather the evidence (in a biased fashion), construct a story to explain the evidence, and then match the story to a decision. This reliance on stories helps to drive investors into the growth trap.