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John Rogers tips to avoid behavioural biases & amass stellar returns – What is value?

by WOOWinvest
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John Rogers tips to avoid behavioural biases & amass stellar returns – What is value?


Rogers has also incorporated behavioural finance into his investment strategy over the years. Rogers explained several elements and biases of behavioural finance that can be useful to investors to amass stellar returns. Let’s take a look at these biases.

The endowment effect: Rogers says investors often make the mistake of falling in love with a company and then overvaluing it which leads them to incur losses in the long run. “Maintaining your objectivity is important,” he says.

The recency effect: Rogers says investors often get swept up in the euphoria or depression of the moment. “People have an inability to look over the horizon,” Rogers says.

Anchoring: Rogers says investors often get tied to old views which leads them to block new vital information which can help them in achieving stellar returns. “People are uncomfortable moving their earnings estimates in light of new information,” he says.

Confirmation bias: Rogers says investors often fall into the trap of reading content that matches what they already believe in which makes them miss out on other important factors. “You have to look outside your comfort zone and hear a contrary perspective,” Rogers says.

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