Blogger Wisdom: Changing Minds

More from Tadas:

Question: What is one thing you have changed your mind about recently in the investment world and why?

Here’s a sample of some answers.

Wayne Lloyd, Dynamic Hedge, @dynamichedge:
For a long time, I believed the best way to maximize returns was to increase rationality and eliminate behavioral and emotional bias. In other words, invest like a robot. Optimizing for rationality will help you with most things in the periphery of investing but when it comes time to make a decision you can live with, you need to trust your intuition. It’s messy and it doesn’t make any rational sense but offloading all that rationality to your unconscious mind pays off – if you’ve done the work. Also, understanding and working around your biases is a lot easier than eliminating them. An important book for making this connection for me was The Gift of Fear by Gavin De Becker.

Jake, EconomPic Data, @econompic:
Given many investors, fund managers, and investment organizations would rather have their priors be proven right and/or look smart for marketing / fundraising purposes than make money, I’ve changed my view regarding smaller investors being disadvantaged relative to larger / institutional investors. As long as focus is on outcomes, behavioral biases are kept in check, and opportunities presented are seized, I believe even small individual investors can outperform in today’s market environment.

Eddy Elfenbein, Crossing Wall Street, @eddyelfenbein:
I’ve recently changed my mind about the nature of volatility. I now believe that volatility is mostly related to what the market has just done. Bear markets cause volatility, not the other way around. Same for bull markets. People talk about the VIX as if it’s the stock market’s blood pressure. That’s just not so. Also, Tadas takes too many vacations.

Posted by on October 20th, 2017 at 2:07 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.