Reptilian brain · Loss, Risk & Scarcity
Normalcy Bias
Assuming things will continue as they always have; warnings about unprecedented events are discounted because nothing like them has happened to you.
An everyday example
Keeping all cash in one bank because banks 'do not fail'.
What it can cost you
Under-preparing for tail events; over-trusting whoever says 'this is normal'.
Warning signs
- I dismissed a warning because it is unprecedented.
- My exposure is concentrated and I feel fine about it.
One thing to do
For any concentrated exposure, write what happens if the unthinkable occurs and what it would cost to hedge.
Is this happening to you right now?
Describe your situation and get a read across all six brains. No account needed.
Check my situationRelated
Not medical, legal or financial advice. How Decision IQ works
One decision idea a week
One useful idea. No daily drip, no pressure.