How to Beat FOBO: The Fear of Better Options (Episode 47)

Updated: November 27, 2020

Listen to Episode 47:

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Episode 47 Chapters:

  • 01:03: A Study on Jams
  • 03:21: FOBO
  • 04:52: Analysis Paralysis
  • 05:58: Episode Break
  • 08:12: Maximizer Mindset
  • 09:17: Satisficer Mindset
  • 11:43: Choosing Investments
  • 13:03: Good is Perfect

Excerpts and Highlights:

The fear of better options, which is also called Maximization, is the relentless pursuit of all possible options for fear that you’ll miss out on the “best” one. However, it’s been found that this kind of mindset would often lead to indecision, frustration, stress, regret, and unhappiness.

The limitations in human cognition make it impossible to examine each and every available option in a single decision-making process.

“Don’t let the perfect be the enemy of the good.” –Voltaire

Satisficing is a decision-making strategy that aims for a satisfactory or adequate result, rather than the optimal solution. They select the first option that meets a given need or select the option that seems to address the most needs rather than the “optimal” solution.

Don’t worry too much about getting the very best all the time, and evaluate each outcome on its own merits rather than against others. Make life easier on yourself by accepting good enough. Because in today’s world where there are countless options and possibilities, good enough has become the new perfect.

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2 comments

  1. I admit to running scans of the market and reading trade ideas from others. I DO NOT allow myself to be consumed with the activity. I have found that I generally do better using my list of “old reliables” than spending too much time looking for the next big thing. Maybe this is because I am a retirement age income investor/trader more than a specular? I do this in basically all my activities these days, preferring to stick with what I know works!!!

    A recent example: A gentleman I admire for his expertise in ICHIMOKU cloud trading put out a question a few weeks ago. He showed two charts and simply asked “which one would you pick.” I instantly saw the answer he was looking for from a technical traders stand point was stock A and I said so. Then, I went on to explain I would rather wait for the other choice, stock B, to take a trade. The answer that the expert was looking for (A) was on fire to the upside and on a small pullback. A great place to jump in if you were inclined to do so.

    Now, the reason I picked the alternative (B) was that it is an old reliable that I am fully familiar with. It has much larger daily volume and important to me, much larger option contract volume. Stock B also pays a regular quarterly dividend which may add to the stability of the stock. I am primarily an income trader much more than a speculator. The new guy on the block is on fore now but I do NOT want to be “the bag holder” if the companies new product does not make the grade. I will run with slow and steady wins the race with just a little speculation using “house money” to spice things up and keep the blood circulation flowing.

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