This paper makes one think of the effect of actually having money in the trade, vs just sitting analyzing data on a Sunday. And the real question is still, how to be free of it? Or control for it?

"The tree of experience in the forest of information: Overweighing experienced relative to observed information." Uri Simonsohn, Niklas Karlsson, George Loewenstein, Dan Ariely


Standard economic models assume that the weight given to information from different sources depends exclusively on its diagnosticity. In this paper we study whether the same piece of information is weighted more heavily simply because it arose from direct experience rather than from observation. We investigate this possibility by conducting repeated game experiments in which groups of players are randomly rematched on every round and receive feedback about the actions and outcomes of all players. We find that participants’ actions are influenced more strongly by the behavior of players they directly interact with than by those they only observe.

[ … ]

One important distinction, when it comes to the process leading to acquisition of information, is whether the information was obtained through personal experience—i.e., in a process that had or could have had direct consequences for oneself—or only by observing the experience of others. We refer to the former as “experienced information” and the latter as "observed information."

Legacy Daily adds:

In Battle for Investment Survival Loeb says: "Knowledge born from actual experience is the answer to why one profits; lack of it is the reason one loses. Knowledge means information and the ability to interpret it marketwise. But, in addition, making money in the market demands a lot of "genius" or "flair." No amount of study or practice can make one successful in the handling of capital if one really is not cut out for it." I think that the education of one's own $1000 put to work in the market cannot be substituted by reading, theoretical analysis, or observation. My questions are: "Do you feel that making money in the market is a natural gift or a learned skill? To which one or two key factors would you attribute your success?"


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