Investment Ideas #1 _ Investment Diary and Personality Traits - Fight the Hindsight Bias!

Investment Diary - Fight the Hindsight Bias!

If your intent is to be a winner in your investment you need to set serious goals. Your activity should be treated as an investment. Rate of Return (ROR) is king and is the final measuring stick of your SPEC plays. 

Your specific comic-book investments are to be judged based on their past rates of return, which can be compared against your other investments to determine which investments are the most profitable. If you invest in 10 comic-books at a 100$ each and you sell them and get less than $1000 in return when they are sold, you lost! Therefore you must consider the type of SPEC plays you invest in and the amount of investment effort required.

Understanding and educating yourself about investing, risk management, money management and psychological factors at play will benefit you.  Not everyone can or will invest the time and effort it takes to be an successful investor. To begin, write down your goals etc in an investment diary including the time and money you can devote.  After a set amount of time you should evaluate your performance to determine your strengths.  ARE you are good at modern SPECs or Golden AGE 

rarities?  

Each year your goals should shift to incorporate your current talents. 

Temperament and Delayed Gratification

Literature on investment strategies analyzes how personality or temperament affects one’s success in the stock market.  The investment literature focuses on an investor temperament.  These same principles can be applied to analyze how your temperament affects your comic-book investment play.  

Are you a careful, deliberate person or completely spur of the moment? Are you a confident decision maker or do you worry and second-guess yourself?   Can you wait on the results/profits with great patience or do you need instant profit now for immediate gratification? Can you change your mind and quickly adjust if need be or do you never change your mind once it is made up?

I divide players into comic-book investors into Temperament Types.  

Accordingly, you need to assess your temperament by thinking about where you fall within these personality attributes.  

Figure 1 illustrates these attributes.

Figure 1. Personality Trait Scale for Investors.

Hindsight Bias will cloud your "View Backwards" unless you keep a diary. 

https://en.wikipedia.org/wiki/Hindsight_bias  (For full article)

"Hindsight bias, also known as the knew-it-all-along effect or creeping determinism, is the inclination, after an event has occurred, to see the event as having been predictable, despite there having been little or no objective basis for predicting it.  

It is a multifaceted phenomenon that can affect different stages of designs, processes, contexts, and situations. 

Hindsight bias may cause memory distortion, where the recollection and reconstruction of content can lead to false theoretical outcomes. 

It has been suggested that the effect can cause extreme methodological problems while trying to analyze, understand, and interpret results in experimental studies. 

A basic example of the hindsight bias is when, after viewing the outcome of a potentially unforeseeable event, a person believes he or she "knew it all along". 

Such examples are present in the writings of historians describing outcomes of battles, physicians recalling clinical trials, and in judicial systems trying to attribute responsibility and predictability of accidents."

Your successes in SPEC plays would have seemed to have been obvious and easily figured out. Not True! Beware!

In your diary you should list the time, date, and reasoning for all of your SPEC play ideas

A diary will be cruel enough to tell you that your best pick was luck, or whether it was a product of some effort and reason. A diary is much more honest than your hindsight biased brain. Hindsight lets you remember events as you wish it had happened, rather than how it actually happened.

Learn your weaknesses/temperament (see above).  

Do you jump to early on the HYPE Train! Think Cloak and Dagger. Real or Mirage?

Highlight and list advice you took from other people/websites/ etc.  

Where are the winning ideas coming from if any. Write down all the ideas that people give and see what works. Also see the logic. See the hype - and separate it from the reality. 

In your diary write down what do YOU think will happen in the immediate future...and why. 

Check your predictions see whether you were right, and if you are right whether it was luck or skill. I would have a Predictions Section. 

I predicted that the TV show with Cloak and Dagger will boost the price of the following issues. Include a best buy date to check you prediction. 6 months? 2 years? 

Feel free to comment here to publicly mark your predictions. :>)

Good Luck