15 rules to protect yourselves from investor biases!

1. Biases apply to me, you, and everyone else.
2. You know less than you think you do.
3. Try to focus on the facts, not the stories.
4. More information doesn’t equal better information.
5. Think whether a piece of information is high strength and low weight, or low strength and high weight.
6. Look for information that disagrees with you.
7. Your failures aren’t just bad luck; examine mistakes to improve your performance.
8. You didn’t know it all along, you just think you did.
9. If you can’t debias, then rebias – we know people will anchor on the irrelevant, so let’s replace the unimportant with the relevant. Set up a sensible valuation framework.
10. Judge things by how statistically likely they are, not how they appear.
11. Don’t overweight personal experience.
12. Big, vivid, easy to recall events are less likely than you think they are.
13. Don’t take information at face value; think carefully about how it was presented to you.
14. Don’t value something more, simply because you own it.
15. Sell your losers and ride your winners.

15 rules to protect yourselves from investor biases!