When the Facts Change, Change Your Mind

Value investors spend most of their lives trying to capitalise on the irrational behaviour of others. Be it short-termism, fear of missing out or greed driving the market, they are all emotions the value investor is usually less susceptible to. But we come with our own set of psychological shortcomings, the most significant of which a strong propensity for stubbornly committing to ideas and refusing to change our minds even in the face of irrefutable evidence. Changing your mind and reversing a prior decision, particularly if you have lost money, damages your reputation, is an affront to your own ego...

Value investors spend most of their lives trying to capitalise on the irrational behaviour of others. Be it short-termism, fear of missing out or greed driving the market, they are all emotions the value investor is usually less susceptible to.

But we come with our own set of psychological shortcomings, the most significant of which a strong propensity for stubbornly committing to ideas and refusing to change our minds even in the face of irrefutable evidence.

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