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?
The anchor being the price I bought the stock.
I have bought stock that's 10-20% above the initial buying price, but I have never bought it >50% above initial price.
Portfolio performance is not just a function of stock picking skills, but also a function of weighting of each stocks.
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.
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's something I plan on doing.
And it is very very uncomfortable to read a well-written short pitch on a stock that I own.
We pay for our biases. And we do ourselves a great favor by defeating our biases.
What are some biases that affect you?