Anthony Bolton on typical Investor Behaviour

[Dennis Ng]

Most people heard of Peter Lynch, the famous Fund Manger from U.S. Most might not have heard of Anthony Bolton. Anthony Bolton is considered the UK’s most successful fund manger. Over 25 years, he delivered a market beating return of 20% in his Fidelity Special Situations Funds. Now that he has retired, he has time to write a Book to share his knowledge/experience.

I would highly recommend this book entitled “Investing Against the Tide” by Anthony Bolton. It is one of the few investment books which I think can pass the test of time.

Cheers!

Dennis Ng, http://www.MasterYourFinance.com

This is what Anthony Bolton said what he observed as typical investor behaviour.

We need to keep an open mind. Once we buy shares, we become less open to the idea that our decision to buy was wrong. We close our mind to evidence that does not confirm our initial thesis.

We need to think independently of others. You are neither right nor wrong because the crowd disagrees with you.

Many supposed experts are not. Many experts never change their view. They remain with a permanently positive or negative view of the world or companies knowing they will be right part of the time.

We all think we are better at investment than we are. You must not let a good run go to your head.

We are often most influenced by the recent past and by recent prices. Often the first plausible answer is the one that influences us.

We are too conservative when we take gains and too relaxed in running losses.

We should ask ourselves if we own it, would we buy it again at this price?

Investors underestimate the likelihood of rare events happening when they have not happened recently, while they overestimate them when they have.