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Why Biology Wants You to Go Broke The investing behavior that actually works goes against everything your brain is wired to do
by Michael Lamonaca, 4 February 2026
Your biology evolved to keep you alive in a world of predators and scarce resources—not to make you a successful investor. The same instincts that protected your ancestors from danger now sabotage every investment decision you make. When everyone is selling and prices are collapsing, your brain screams “danger—get out now!” When everyone is buying and prices are soaring, your brain screams “opportunity—don’t miss out!” This is precisely backwards from what actually works in investing. Buying when quality companies are selling at deep discounts feels terrifying. Doing nothing when prices are inflated and everyone else is buying feels like watching free money slip away. But these uncomfortable feelings—the terror of buying when others sell, the agony of sitting still when others buy—are exactly what separate successful long-term investors from everyone else. Your brain is fighting you every step of the way, and understanding why is the first step to fighting back.
The biological trap is simple: your brain prioritizes immediate survival over long-term prosperity. When stock prices collapse and panic spreads, your amygdala—the part of your brain responsible for fear responses—takes over. It sees everyone running for the exits and interprets this as mortal danger. In our evolutionary past, if everyone in the tribe was fleeing, you fled too or you died. Questioning the crowd meant becoming lunch for a predator. This response kept humans alive for millennia, but it destroys investment returns. Remember March 2020? Quality companies trading at 50% discounts. Your hands probably shook as you tried to click “buy.” That physical terror—heart racing, palms sweating—was your biology screaming danger. But that was exactly when buying worked. When a quality company’s stock drops 40% because the market is panicking, your biology doesn’t see an opportunity to buy an excellent business at a discount. It sees danger and demands you join the stampede to safety. The cheaper the price gets, the more terrifying it feels. Your ancestors survived by following the crowd away from threats. You go broke by following the crowd away from opportunities. On the flip side, when prices soar and euphoria spreads, a different biological trap activates: FOMO—fear of missing out. Your brain’s reward centers light up watching others get rich. Social proof, another survival mechanism, tells you that if everyone is buying, it must be safe and smart. Your dopamine system, designed to reward behaviors that help survival and reproduction, floods your brain with pleasure at the thought of joining the winning trade. Every story of someone making easy money feels like confirmation you should act now. But this is when prices are most dangerous and future returns are lowest. Your biology pushes you to buy exactly when you should be cautious or selling. The discomfort of sitting still while others profit feels unbearable—but it’s precisely the discipline that preserves wealth.
Successful investors fight biology, not because they’re smarter, but because they’ve trained themselves to recognize when instinct is the enemy. Warren Buffett’s famous advice to “be fearful when others are greedy and greedy when others are fearful” isn’t just a clever saying—it’s a battle plan against your own brain. When Buffett bought stocks during the 2008 financial crisis while everyone else was selling in terror, he wasn’t acting on instinct. He was acting against it. His biology was screaming the same warnings as everyone else’s, but he had trained himself to recognize that scream as a signal to buy, not sell. When he sat on cash during the late 1990s tech bubble while everyone else was getting rich on internet stocks, his FOMO was as powerful as anyone’s. But he recognized that feeling as a signal to stay cautious, not to chase. The same pattern repeated in March 2020—while panic selling consumed the market and quality businesses traded at massive discounts, successful investors forced themselves to buy despite the terror. This isn’t natural. It’s learned discipline built over decades of fighting the same biological impulses everyone has. The key insight: the discomfort you feel when buying during panic or sitting still during euphoria isn’t a warning you’re making a mistake—it’s confirmation you’re doing something right. If it feels comfortable and safe, you’re probably following the crowd. If it feels terrifying and lonely, you’re probably on the right track.
The practical reality is brutal: you cannot eliminate these biological responses, you can only recognize and override them. Your amygdala will still scream danger when prices collapse. Your dopamine system will still crave joining the winning trade. You cannot rewire millions of years of evolution. But you can build a decision-making framework that activates before your biology takes over. Write down your investment criteria when you’re calm and rational—what makes a quality business (strong return on equity, manageable debt levels, solid cash flow generation), what price would make it attractive, what circumstances would change your thesis. Then, when panic or euphoria strikes and your biology is screaming at you, you have a rational framework to reference instead of just your feelings. When a quality company you’ve researched drops to half its value because the market is panicking, your framework tells you to buy even as your instincts scream to sell. When prices are soaring and everyone is buying, your framework tells you to sit still even as your FOMO becomes physically painful. The discomfort never goes away—you just learn to recognize it as the cost of doing what actually works. Most investors fail not because they lack intelligence or information, but because they can’t tolerate the psychological pain of acting against the crowd. They buy when buying feels safe—after everyone else has already bought and prices are high. They sell when selling feels safe—after everyone else has already sold and prices are low. This guarantees poor returns. Biology wants you to survive to tomorrow. Successful investing requires sacrificing today’s comfort for tomorrow’s prosperity. These goals are incompatible, and biology usually wins.
When everyone is selling and quality companies are trading at deep discounts, your brain will tell you this is dangerous and foolish—that’s your signal to buy. When everyone is buying and prices have soared beyond any rational valuation, your brain will tell you you’re missing out on easy money—that’s your signal to sit still or sell. The discomfort you feel making these decisions isn’t evidence you’re wrong. It’s evidence you’re fighting biology and doing what actually works. Every successful long-term investor has learned this lesson: if investing feels comfortable, you’re probably following the crowd to mediocre returns or losses. If it feels terrifying and lonely, you’re probably on the path to building real wealth. Your biology evolved to keep you alive, not to make you rich. Recognizing when these goals conflict is the difference between investors who build wealth and those who watch it slip away following their instincts.
This analysis is for educational purposes only and does not constitute financial advice. I am not a licensed financial advisor. All investing involves risk of loss. Do your own research and consult a qualified professional before making investment decisions.
Tags: Behavioral Finance, Investment Psychology, Market Psychology, Contrarian Investing, Investor Behavior, Financial Decision Making