7 timeless pitfalls of investing
By Level13  •  March 31, 2010
[caption id="attachment_1853" align="alignright" width="150" caption="Photo by kevincollins"]Photo by kevincollins[/caption] Regardless of institutional or retail investors, chances are, they would have committed these sins at one point or another. 1) Placing forecasting at the very heart of the investment process. An enormous amount of evidence suggests that investors are generally hopeless at forecasting. So using forecasts as an integral part of the investment process is like tying one hand behind your back before you start. 2) Investors seem to be obsessed with information. Instead of focusing on a few important factors (such as valuations and earnings quality), many investors spend countless hours trying to become experts about almost everything. The evidence suggests that in general more information just makes us increasingly over-confident rather than better at making decisions. 3) The insistence of spending hours meeting company managements We arent good at looking for information that will prove us to be wrong. So most of the time, these meetings are likely to be mutual love ins. Our ability to spot deception is also very poor, so we wont even spot who is lying. Read more...
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By Level13
Level13 is a 30 yr old guy who started investing about 4 years ago. He is a value investor who tries to buy a dollar note for eighty cents or less. Level13 Investor Creed "Do not believe in anything simply because you have heard it. Do not believe in anything simply because it is spoken and rumored by many. Do not believe in anything merely on the authority of people who are above you. Do not believe in anything simply because it is found written in books. But after observation & analysis, when you find that anything agrees with reason and is conducive to the good and benefit of one and all, then accept it."

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