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Why flowery narratives around some stocks lead to biases and wrong buying decisions

Retail investors are often overcome by framing and confirmation biases. What are these traits and how do you overcome them?

April 30, 2021 / 11:49 AM IST

I always tell investors that stock investing is 1 percent knowledge and 99 percent temperament.

That is, even after you have done thorough research on a stock and attained all the required knowledge, your score is 1 out of 100. Now, you have to work for the remaining 99 marks.

This does not mean knowledge is not important. Knowledge is the foundation on which temperament has to be developed.

Let’s talk about one such aspect of temperament.