Re-visiting a report by Dresdner Kleinwort Wasserstein that tore the fund management business a new one back in 2005.
This report explores the common behavioral mistakes made by investment fund managers. Identifying and mitigating psychological biases is important if one plans to become a good fund manager.
Here are the 7 deadly sins:
1. Forecasting
2. The Illusion of knowledge
3. Meeting with companies (this is my favorite…many investment managers waste tons of money to have ‘love-ins’ with management)
4. Thinking you can outsmart everyone else
5. Short time-horizons and over-trading
6. Believing everything you read
7. Group decisions
