Insight

A commenter on Sailer's blog proposes:

Humans are irrationally risk averse. On average, they feel the pain of losing X dollars twice as much as they feel pleasure for gaining X dollars. This means that they are systemically biased to overreact to bad news in the stock markets. A straightforward elaboration of this will get you to value investing a la Graham and Buffet, which is a long term proven strategy for beating the market.

This is the first learnable idea I collect in this decade. I had settled more or less on this strategy but I didnt know why it was working. Another straghtforward elaboration of the same is that panics are opportunities. The situation is never so severe as everybody thinks and panics are the time to buy. A smart investor should always be searching for panic situations, where people is afraid and pessimistic. One should search for people who thinks that the world will end tomorrow.