Investing can test even the best of us and reveal our true temperament. Most ideas may work well in theory or on paper. Rarely do they translate effectively into the real world. Humans are not well-equipped to stay the course when it comes to investing; often our biggest enemy is ourselves. I often notice this… Continue reading
Post Category → Behavioural Finance
You should never swim blind in the stock market!
I was swimming when I thought about the similarities between swimming blind in a pool and swimming blind in the stock market. At the time, I was in Kuala Lumpur, where my sons and I love to swim. Since it was a hot day, as it often is in Malaysia, we decided to take a… Continue reading
The biggest challenge of investing is being consistent like clockwork.
Being a full-time private investor is no easy feat, and one of the hardest parts is being consistent like clockwork. Many people envision private investing as glamorous, but there are numerous challenges that come with being a full-time money manager. Like many other investors who have chosen this path, I face a variety of obstacles… Continue reading
When I eliminated False Choices, I became a better investor.
The false choices fallacy, also known as the false dichotomy or either/or fallacy, occurs when only two options are presented as the sole possibilities, despite the existence of other viable alternatives. This fallacy misrepresents the issue by oversimplifying the choice, often by excluding middle ground or alternative solutions. Many of us tend to view a… Continue reading
The Sunk Cost Bias can impact even the best investors.
Sunk Cost Bias (Fallacy) is a real and damaging phenomenon that we are often unaware of. It is our tendency to continue investing in something, whether it’s money, effort, or time, even when the costs outweigh the benefits. This behavior is associated with “Commitment Bias,” where we stick to our past decisions despite evidence suggesting… Continue reading
Sometimes to be successful you need to be in the right environment.
Investors and entrepreneurs, everywhere, sometimes to be successful, it’s all about being in the right environment. Just like farming, to reap an abundant harvest, the environment and conditions must all be right. We are taught to hustle, grind, and push through, but sometimes that is not the answer or the best path. Itβs hard to… Continue reading
Saying NO is the best way to avoid horrible companies and leads to better results.
π Penelope was the Queen of Saying NO. She was the wife of Odysseus, the Queen of Ithaca, and the daughter of Spartan king Icarious and Asterodia. Penelope is depicted in the cover image rejecting a man who has come bearing flowers. Despite more than a hundred attempts to lure her, Queen Penelope was known… Continue reading
How making more investing decisions does not lead to better results.
π What is Decision Fatigue? Decision fatigue is a phenomenon that affects each and every one of us. Every day, we are faced with thousands of decisions, from what to wear to what to eat, which route to take, and so on. These decisions accumulate and by the end of the day, we feel mentally… Continue reading
What is the impact of Action Bias and why more activity does not bring better results?
What is Action Bias? One of the most detrimental biases that can hinder investment returns is the tendency to act for the sake of acting. I have personally experienced the effects of action bias in my business, investing, and personal life. To illustrate the concept of taking action when it is unwarranted, I will share… Continue reading
The best guide on how to build an investment philosophy.
To build an Investment philosophy is to build a road map that guides your investment strategy and process. It is the framework that helps you make investment decisions, based on your beliefs and principles that correspond with your financial goals and tolerance to risk. A lot of investors lack clarity about the importance of a… Continue reading