Fast, automatic, intuitive mental processing — pattern recognition that operates largely below conscious awareness, prone to bias and heuristic shortcuts.
Deeper Explanation
Kahneman's dual-process model identifies System 1 as the default mode of human cognition: rapid, effortless, associative, and emotionally driven. System 1 is excellent at recognising familiar patterns and responding to immediate threats. In investing, System 1 operates when a familiar chart pattern triggers a buy instinct, or when a falling stock price automatically feels like danger. Most investment mistakes occur when System 1 drives decisions that require the slower, more effortful analysis of System 2. The first line of defence is awareness: asking "Is this a System 1 response?" before acting on an investment impulse.
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Go deeper into the Behavioural school — frameworks, case studies, and decision systems.