1/8 Thread: My behavioral biases

It is absurd to think market is riddled with behavioral biases but I myself am somehow immune from these very biases.

Most investors are aware of behavioral biases of other investors but rarely of themselves.

So what are my behavioral biases?
2/8 One particular bias that has been a recurring theme in my investing is anchoring bias.

The anchor being the price I bought the stock.

I have bought stock that& #39;s 10-20% above the initial buying price, but I have never bought it >50% above initial price.
3/8 In many cases, increasing weight to winners would enhance my portfolio results.

Portfolio performance is not just a function of stock picking skills, but also a function of weighting of each stocks.
4/8 If your biggest winner had lowest weight in the portfolio, you may not feel the reward of picking the right stock.
5/8 The other shortcomings I have noticed is I don& #39;t have a good idea on how good my selling decisions are.

I would monitor stocks after selling them for a few weeks/months, and then generally stop looking at them. Some of these stocks remain down a lot making me feel justified.
6/8 On the other hand, there are stocks I have sold way too soon.

Sometimes I think I should maintain a paper portfolio which comprise of the stocks I have sold and monitor them on an ongoing basis.

So far, I have been too lazy to do it, but it& #39;s something I plan on doing.
7/8 A bias that& #39;s sneaky and hence difficult to spot is confirmation bias. It& #39;s just SO comforting to read pieces that confirm my thesis that it is nothing short of an addiction.

And it is very very uncomfortable to read a well-written short pitch on a stock that I own.
8/8 Investing is, however, one of the few professions in which we have strong incentives to listen to opposing viewpoints even when it& #39;s uncomfortable.

We pay for our biases. And we do ourselves a great favor by defeating our biases.

What are some biases that affect you?
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