Behavioral Finance – Bias Deep Dive: Representativeness

Posted by Jason Apollo Voss on Sep 15, 2020 in Behavioral Bias Deep Dive, Blog | 0 comments We are now in the home stretch of my series of deep dive articles on behavioral finance. Up this week is representativeness bias. One complaint I have with some of behavioral finance is their changing of terms we all know and giving them new titles. This is especially true of representativeness bias which is essentially the use of stereotypes when judging investment phenomena. In several weeks I...
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Behavioral Finance – Bias Deep Dive: Availability

Posted by Jason Apollo Voss on Sep 8, 2020 in Behavioral Bias Deep Dive, Blog | 0 comments Like the other biases in this behavioral finance deep dive series is a mental shortcut. Specifically, it is the phenomenon where people’s opinions and concerns are unduly shaped by immediate: information, mental models, and other things recently experienced. Essentially, this bias boils down to “if something can be recalled then it must be important.” Recall that at the end of this series I am...
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Behavioral Finance – Bias Deep Dive: Anchoring

Posted by Jason Apollo Voss on Sep 1, 2020 in Behavioral Bias Deep Dive, Blog | 0 comments Have you ever found yourself in a conversation stuck on a thought? If so, you are likely to have been in the midst of a discussion swallowed by anchoring bias. Anchoring is the fixation on a reference point within a continuum of information in decision making and is the latest bias deep dive I am covering for investors. At the end of this series I am going to land with A Theory of Behavioral...
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Behavioral Finance – Bias Deep Dive: Herding

Posted by Jason Apollo Voss on Aug 25, 2020 in Behavioral Bias Deep Dive, Blog | 0 comments Why do markets form bubbles? Why do markets capitulate and collapse in value rapidly? Asked succinctly: why do investors engage in herding behavior? This is the fourth in a series of deep dive articles on behavioral finance and its major biases. Ultimately, I am going to land with A Theory of Behavioral Finance. In the meantime, let’s turn our attention to why investors stampede.   A...
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Behavioral Finance – Bias Deep Dive: Confirmation

Posted by Jason Apollo Voss on Aug 18, 2020 in Behavioral Bias Deep Dive, Blog | 0 comments Up third in my deep dive articles on the crucial behavioral biases to understand as investors is this one on confirmation bias. Similar to the other biases, confirmation bias has nuances that if understood can change our approach to investing. This ensures we are not victims of their pernicious effects. Recall that my ultimate goal is to have this series culminate in a Theory of Behavioral...
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Behavioral Finance – Bias Deep Dive: Overconfidence

Posted by Jason Apollo Voss on Aug 11, 2020 in Behavioral Bias Deep Dive, Blog | 0 comments This is my second in a series of deep dive articles on the most important behavioral biases that we confront as investors. In this week’s article I discuss overconfidence. It bears repeating that most investment pros have not read the original source material on the biases and thus are missing out on key nuances. I think understanding these subtleties improves our ability to overcome the biases....
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Behavioral Finance – Bias Deep Dive: Loss Aversion

Posted by Jason Apollo Voss on Aug 4, 2020 in Behavioral Bias Deep Dive, Blog | 2 comments This begins a series of deep dive articles on the most important behavioral biases that we confront as investors. Now before you dismiss these articles with a cavalier “I already know this stuff,” I want to point out that much like Shakespeare, most people who quote behavioral finance and its bias precepts have never actually read the source material. My point in this series is to summarize the...
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