Why Investors Are So Surprised by Surprises

Our mental models of how the world works aren't very good.

Surprised by a hand to the face?

Photographer: Jerome Favre/Bloomberg

Today I want to discuss the curious nature of surprises. Astonishment, shock, alarm, disbelief, wonder, amazement -- pick any synonym you want, we seem to be genuinely surprised by what can only be described as ordinary events. At least, that is how things look when emotions are no longer running high and in the cool light of hindsight. 

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