The lizard brain is great at finding food and shelter, but terrible at navigating financial markets.
So, using the lizard brain when making decisions about money creates several problems.
The problem is that when we handle money, we too often use this archaic part of our brain—our lizard brain—that helped us survive for tens of thousands of years before financial markets were even invented, instead of our cool, analytical prefrontal cortex.
The lizard brain isn't stupid, but it causes us to lose our reasoning when faced with problems our ancestors never faced.
---From "Chapter 1, Irrational Humans | The Lizard Brain: Designed to Fail at Investing"

Many people make bold predictions about future inflation rates.
Some books advise against preparing for the coming deflationary period, while others argue that inflation is coming and investors should buy gold to protect themselves.
However, I don't really believe people who guarantee that inflation or deflation will come in the future.
The inflation rate in the United States will depend on the decisions of the Federal Reserve, the monetary authority.
I am of the opinion that those who decide monetary policy are not controlled by circumstances.
Therefore, to effectively predict inflation, we need to understand in detail the “push and pull forces” that determine inflation.
Inflation forecasting also depends on the ability to predict human behavior.
Just like when playing poker.
---From "Chapter 4, Inflation | The Return of the Giant Monster"

Remember, when the market goes to extremes, the lizard brain always points to the opposite side of where the opportunity is.
Even when rational economic figures suggest the dollar's decline against major currencies is over, the ruthless market won't stop at "fair value."
Just as the dollar was grossly overvalued before it stopped rising, the science of irrationality suggests that the dollar will only end its decline after it becomes significantly undervalued and despised by experts.
---From "Chapter 5, The Dollar and Exchange Rates | The United States, the International Beggar"

Optimism and pessimism come up again and again in investing.
If everyone is bullish on stocks, they are probably not a good investment.
On the other hand, if there is widespread pessimism and a gloomy outlook for stocks, then a rise in the stock market can be expected.
This psychology is reflected in stock prices.
Let's say an investor decides to forgo the guaranteed $4.40 in interest from bonds and opt for the S&P 500, which only receives a dividend of about $1.81.
Why would this person willingly accept a lower yield? In this case, they accept today's lower yield because they believe the dividend will increase in the future.
However, if the stock market is in a downturn, investors will only choose stocks when the dividend is higher than the bond interest rate, that is, when the yield is clearly high.
---From "Chapter 6, Stocks | To Hunt or to Be Hunted"

Adjustable rate mortgages are very tempting because they offer very low monthly payments.
One day, I was sitting in my apartment jacuzzi when my neighbor, Alec, told me that he was moving out of Cambridge and into a bigger house he had bought in the Boston suburbs.
As always, I asked, “Did you get a fixed-rate mortgage or a variable-rate mortgage?”
Alec answered that it was a variable rate.
When asked why he took out a variable-rate mortgage, he replied, “I can’t afford to buy with a fixed-rate mortgage.”
I would recommend exactly the opposite strategy.
If the price of a house is so high that you can't afford the monthly payment when taking out a fixed-rate loan, lower your standards.
The answer is to buy less expensive real estate.
---From "Chapter 8, Real Estate | Build Strength, Become Strong, and Endure Difficult Times"

The brain shouldn't be thought of as a single, cohesive entity. According to MIT professor Marvin Minsky, it should be understood as "a society of minds with different and sometimes competing goals."
The part of the lizard's brain that thinks and perceives more is located in the prefrontal cortex, whereas the lizard's brain is located elsewhere.
Additionally, recent neuroscience research suggests that the lizard brain is associated with behaviors that bring us loss.
If you feel the urge to trade, it may be a tip from your lizard brain, not your prefrontal cortex.
Although this old brain may have guided our ancestors towards prey, it won't make us rich.
So, if your brain gives you a tip that it's an investment idea, you should look at it with a skeptical eye.
Was that idea truly born from sound, cool-headed analysis? Or did it magically appear without my knowledge? If it feels like a golden opportunity, a moment that will pass, and an urgent need to act immediately, then it's the lizard brain at work.
Whenever I have an investment idea, whether I'm feeling inspired or not, I wait at least a week before acting on it.
This principle may cause you to miss out on big opportunities, but it will at least prevent you from making a lot of bad decisions.
---From "Chapter 9, Put Shackles on the Lizard's Brain"

Rather than looking for ideas that are "unprofitable," we should look for ideas that are "stupid and unlikely to make money."
This applies not only to general investment risks but also to specific investment assets.
We must take risks when safe investments are in vogue.
For example, if there is a widespread belief that debt is bad, that is a good sign that taking risks can yield high returns.
In general, wait until you hear the word "avoid stocks."
Only when you can invest based on visible human psychology rather than uncertain predictions will you be able to wisely overcome the temptation of the lizard brain.

---From "Chapter 10: Invest in the Most Dirty Market"