Emerick Mary

“Michael Steinhardt, the legendary hedge fund manager, had perhaps the most extreme response conservatism. In his autobiography, No Bull, Steinhardt writes:

I tried to view the portfolio fresh every day... Irregularly... I would decide I did not like the portfolio writ large. I did not think we were in sync with the market, and while there were various degrees of conviction on individual securities, I concluded we would be better off with a clean slate. I would call either... Goldman Sachs... or Salomon Brothers and ask to have us taken out of the entire portfolio. In swift trade, one of these firms would buy our longs and cover our shorts... In an instant, I would have a clean position sheet. Sometimes it felt refreshing to start over, all in cash, and to build a portfolio of names that represented our strongest convictions and cut us free from wishy-washy holdings.

While the idea of selling the entire portfolio may sound a little extreme, it shows the discipline that is needed to overcome our behavioral biases. Hanging onto a view simply because it is your view is likely to end in tears. As Keynes said "When the facts change I change my mind, what do you do sir?”
― James Montier, The Little Book of Behavioral Investing: How not to be your own worst enemy

“we don’t need to outsmart everyone else. We need to stick to our investment discipline, ignore the actions of others, and stop listening to the so-called experts.”
― James Montier, The Little Book of Behavioral Investing: How not to be your own worst enemy