How Not Buying a House Led to a Fortune Lost

Meet Amos Nadler, a behavioral finance professor who decided to test his theories in reality. He dabbled in the stock market, buying Nvidia shares when they were just a few dollars each. He owned somewhere between $800 to $1, 000 worth of Nvidia, and sold a good chunk of them before 2014. At the time, he thought he was making a smart move. In fact, he wanted to make mistakes to learn from them.

But, little did he know, Nvidia shares would split and skyrocket to over $139 each. If he had held onto his shares, he would have seen a gain of over 28, 000%. That's right, he would have had enough to buy a nice house somewhere. Why did he sell? He feared that Nvidia's rapid rise would lead to an equally sharp fall. This fear, a common cognitive bias known as risk aversion, led him to cash out and miss out on a life-changing fortune.

Actions