Extremely Bad Decisions

There are undoubtedly countless investors nursing losses because of a choice made in recent years to abandon value-oriented strategies to fully commit to the rapidly accelerating growth bandwagon. Although the brutal reversal in the more speculative end of the growth universe can be read as a salutary lesson on style and factor rotations, it is not. It is about the dangers of making pro-cyclical decisions when returns reach extreme levels. Rather than worry about such excesses, investors willfully and gladly embrace them. We put more chips on the table as the odds of success deteriorate.

More here – Behavioural Investment

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