Write-up initially based on key points from Chen Fen Fai, CIO & Country Head of Eastspring Investments at the recent FSM event in Penang. E&OE. Alternative Title: The Good, the Bad & the (sometimes Ugly) Action Needed.
- As humans, we have the ability to control emotion & make decisions
- It is good to be a skeptic when investing – ask negative Qs, ask many Qs (with apologies in advance to all investment advisors out there ;))
- Whether as an individual investor, fund manager, broker, etc – we all have biases & blind spots
- Self control & willpower is NOT sufficient vs behavioral bias
- We often overrate our abilities is amplified by illusion of control
- Beware of self-serving bias prone to act in ways supportive of own investments
- We need to develop investment processes
- Avoid investments (or companies) if don’t understand the business model (know your circle of competence)
- Invest only what you have AND are comfortable with
- Information is important – but decision & action is needed!
- Know what you’re doing – are you value investing VS growth investing VS having fun (aka casino de investing)?