How the blindfolded monkeys sell stocks better than the pros
The famous blindfolded monkeys throwing darts at a newspaper’s stock pages are back in town! Now they sell stocks much better than the pros, according to a new study.
Even for the pros, selling a stock with a less stellar holding period return can be associated with a sense of regret, an unwelcome feeling of giving up on a high conviction investment case. And with that goes hundreds of hours of research about the company out of the window.
The best asset management companies are aware of this. They go a long way to make sure that pride and cognitive biases doesn’t interfere with rational decision making. But it’s not easy.