Your Biggest Risk as a Penny Stock Investor
The single biggest risk to investors is confirmation bias.
You can find thousand of examples which support each side of the exact same argument. Whether talking about penny stock trades specifically, or larger stock market buys and sells, confirmation bias is absolutely the biggest risk to your cash money.
Peter Leeds has written articles on confirmation bias for About.com and Forbes. Simply put, most people don’t even realize that they are doing it, but they will spot and believe arguments which agree with what they already believe, while dismissing positions which do not agree with what they already believe.
You must keep an open mind, and think objectively, not subjectively. When confirmation bias takes you over, you may simple believe what you already do, whether or not it was accurate in the first place.
I also go on to tell you about my almost run-in with an 8 foot bull shark in Alabama.