As a dedicated saver turned professional investor, I’ve come to recognize the importance of making rational, data-driven investment decisions.  In this pursuit, understanding cognitive and behavioral biases has become critical.  My latest learnings have been around anchoring bias, one of the 315 behavioral biases I’ve found to be pervasive in my daily role managing HIT Capital, and advising super savers. Anchoring bias refers to our tendency to rely too heavily on the first piece of information we receive about a specific topic.  This "anchor" overly influences how we perceive all subsequent data thereafter.   I will delve into a specific [...]

Adverse Selection Bias is when one person in a transaction has more information than the other.  It is a specific subset of selection bias and has recently been on my mind.  A couple weeks ago, in my investment research for HIT Capital I found a stock growing 25% a year and trading at a P/E of 5.  To translate that into English, I found a stock trading 4x cheaper and growing 8x faster than the average US company.  But in my next level of research, I learned the stock’s largest owner, who owns 41% of the stock, was selling [...]

A Two-Decade Reflection on Happiness and the Age Positivity Effect As I reflect on my own life journey, I realize that my pursuit of happiness is still evolving.  Initially, my goals were about me, as I focused on personal achievements like earning a degree, finding love, and competing professionally. Later my goals began to include others, like achieving financial independence for my family, and creating a business.  Now my  focus is just as much on me as on others, like supporting my wife’s mission to help our local school, growing the HIT family's wealth, and helping my kids learn. [...]

Imagine strolling through your favorite supermarket on a Sunday evening after finishing a game of soccer with your friends. You're worn out, hungry, and the air is filled with the tempting aroma of freshly cooked pastries. As you pass the second vendor he is frying up some crackling crispy pork, your mouth waters at the thought of biting into it. Your stomach is screaming "Yes!" and before you even have a chance to weigh the pros and cons, you find yourself buying some. This instinctive, visceral response is a prime example of the affect heuristic, a mental shortcut that [...]

It’s not often I get that lump in my stomach but yesterday it happened. Assertio Holdings, an investment of mine, had a stellar first half of the year. They were cheap, growing, and just closed a deal reducing their risk and adding a potential multi-billion dollar product to their repertoire. As I sat down to listen to their quarterly update, out of the corner of my eye, I saw a flash of red, Assertio's stock price plummeted. The market had just closed and their share price was down almost 40%. It must be a mistake I thought, so I looked [...]