You’re a Liar

Brendan Mullooly asked a bunch of people the following question:

What do you consider to be your biggest behavioral bias (as it pertains to investing or personal finance) and how do you work to control it?

My answer:

Hindsight bias was my biggest hurdle to overcome.

Hindsight bias makes one part of our brain lie to another part without even realizing it. The way I conquered my internal liar was to write down all of my trades and why I did them. Once every few weeks I would read what I wrote in order to check myself. If I knew Amazon was going higher, why did I short it 5 times due to valuation concerns?

This is a fool proof system. I mean, it takes a real fool to think they knew what was going to happen when their own words prove otherwise.

My favorite answer came from Jim O’Sam:

“What do you consider to be your biggest behavioral bias?” Being a human being.

“How do you work to control it?” Being a quant.

Hit the link below for the whole shabang

A MIRROR ONTO OURSELVES