Edmund Simms's avatar
$26.5m follower assets
"In any diversified portfolio..."
“In any diversified portfolio, there will be both winners and losers, and the consideration that should determine which you should sell, if any, is certainly not the price at which you bought it originally.”
— Daniel Kahneman
Jensen Butler's avatar
Is that really a Kahneman quote? One of my all time favorite thinkers but didn’t know he touched on finance much versus broadly behavioral economics
Johan Eklund, CFA's avatar
@jensen @valuabl Anchoring bias ?
Edmund Simms's avatar
@jensen @piggyback, it's called the disposition effect
Joshua Simka's avatar
@jensen I looked a little on Google and found the quote attributed to him elsewhere but couldn't find a source. Could be from a scholarly paper. I don't think this is from Thinking, Fast and Slow though.
Edmund Simms's avatar
@tomato @jensen, he said it in an interview I watched. He's a brilliant man. Whenever I start feeling 'too big for my boots,' I like to read or listen to Kahneman to remind myself that it's mostly luck and randomness and my brain is tricking me.
Rihard Jarc's avatar
Still can't believe how many investors are still to fixated on the price of which the bought and make decisions around that.
Joey Hirendernath's avatar
Love this quote.

Kahneman is such an extraordinary thinker. Completely changed the way decisions in finance are viewed now.

Definitely turned Adam Smith's concept of the rational-economic upside down.

Smith: Man makes decisions based on the rational analysis of potential and desired outcomes and acts in his (or her) own rational self-interest.

Kahneman: I think not
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Samuel Meciar's avatar
wholeheartedly agree!
Reasonable Yield's avatar
So long as you are roughly correct 55% to 60% of the time and size efficiently. Sizing is sometimes more important than asset selection.