Fact-based vs. Opinion-based Investing – August 2017

Fact-based vs. opinion-based investing

“When my information changes, I alter my conclusions. What do you do, sir?” – John Maynard Keynes

One of the hardest and most profitable skills to develop as an investor is the ability to be open to new information and to change one’s mind when new information alters one’s previous conclusions. At Somar we have improved our returns by leveraging new information to change long positions into shorts and short positions into longs. To develop this skill, we had to overcome 3 barriers:

  • Confirmation bias
  • Commitment and consistency bias
  • Ego
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