Somehow I get the feeling that in active investing sunk cost fallacy, confirmation bias run rather rampant.

Confirmation Bias

We look for views but filters out to listen to the folks who agrees with our thesis. And it gets more comforting that our views are the general consensus. The probable way to guard against this is to listen to fresh views or the alternative thesis, much akin to people telling you off. They might provide some counterbalance to a richly beautiful thesis. Spend more time exploring the what if scenarios to test your investment in it. A good prospect will stand up against that. The good thing is one that isn’t really rock solid will show more holes over time.

Sunk Cost Fallacy

Margin of safety is not about you buying something low enough that you haven’t lose money yet, but the value of what an asset, business, to the ......