Investor Psychology

Investing Insights: Mental Accounting & Mind Games

There was a time when a cattle rancher in need of new shoes had to find a shoemaker who wanted a cow. This was the barter system which clearly impeded trade and specialization of labor (that cattle farmer may have given up and decided to make his own shoe). To…

Don’t Ever Risk More Than You Are Willing To Lose

This is not click bait to have you read yet another bearish article on the stock market. I am currently bearish, by the way, but that has nothing to do with this article. Whether you manage large sums that are deeply invested in the market and hard to withdraw, or…

Successful Investing Means Avoiding Mistakes

If you believe most marketing material, it would be easy to come to the conclusion that great ideas are the primary driver of investment performance. Examples of how a manager uncovered great companies trading at a discount or ones who made a big profitable macro calls are plentiful. Great calls…

How Stock Corrections And Bear Markets Decimate Investor Gains

“Nobody ever lost money taking a profit” ~ Bernard Baruch When is a 10 percent stock market correction not a 10 percent correction? How about a 20 percent plunge being a bit more than just crossing the line into bear market territory? Huh? What? Bear with me for a minute….

4 Prevalent Investor Biases And How To Manage Them

If you had to analyze every decision you make on a given day, you probably wouldn’t get much done. You might not even make it to work. Once awake, analyzing whether you should brush your teeth first, then shower then shave or change the order would surely slow down your…

Investors: The Dangers Of Performance Chasing

The most prevalent disclaimer in the investments world goes something like this – “past performance may not be repeated”. If you don’t believe us, just read the disclaimers from investment firms, including ours. Despite the prevalence of this disclaimer, investors often place the lion’s share of their decision making process…

Behavioral Bias: How Investors Can Profit From It

All investors make errors that can often be traced back to a behavioral bias or emotional mistake. If under certain circumstances these mistakes are systematic, then it is not a stretch to believe we can develop systematic strategies to profit from them. After all, this is the essence of active…

Understanding the Ups and Downs of Investor Behavior

“The investor’s chief problem – and even his worst enemy – is likely to be himself” – Ben Graham Investing is not easy. If you are an active investor, directly involved in the investment process, it requires an immense amount of work. Picking investments, developing a buying process and a…

3 Golden Nuggets of Wisdom for New Traders

One of the biggest hurdles in trading is overcoming our natural tendencies (or bad habits) we bring with us when getting started. If we’re not careful, these seemingly small behavioral biases can turn into big problems and prevent bigger success down the road. The three biggest trading challenges I see…