What is déjà vu
Deja vu
Deja vu is a phenomenon in which you feel as though you have already experienced something, even though you should not have. In French, it means “already seen.”
The causes of deja vu are not yet fully understood. However, it is believed that memory, attention, and judgment in the brain are involved, and three main theories are considered plausible:
- Memory confabulation theory
Deja vu is thought to occur when memories are confounded when experiencing something similar to a past experience.
- Attention bias theory
Deja vu is thought to occur when attention focuses on a particular thing, causing the brain to process that information excessively and feel as though it has experienced it before.
- Disruption of brain activity theory
Deja vu is thought to occur when there is a disruption in brain activity, making one feel as though they have experienced it before.
Deja vu and investing
Deja vu is also one of the cognitive biases that can occur in investing. If you fall into deja vu, you may base your investment decisions on past experiences, potentially leading to losses.
For example, you may buy a stock that previously rose sharply, hoping it will surge again. However, past experiences do not necessarily reflect the future. Stock prices fluctuate due to many factors, so making investment decisions based on past experiences can be dangerous.
How to prevent deja vu
To prevent deja vu, pay attention to the following:
- Do not be bound by past experiences
Past experiences are only past information. To predict the future, you need to consider not only past experiences but also the current situation and future outlook.
- Gather information from a wide range of sources
When making investment decisions, it is important to collect information from various sources and analyze it from multiple perspectives. Doing so helps you make objective investment decisions without being bound by past experiences.
- Control your emotions
Deja vu can lead to emotional reactions based on past experiences. When emotional, you cannot make calm judgments, so caution is required.
Summary
Deja vu is one of the cognitive biases that can occur in investing. Falling into deja vu can cause you to base investment decisions on past experiences, potentially leading to losses.
To prevent deja vu, avoid being bound by past experiences, collect information from a wide range of perspectives, and control your emotions.
