Chris Dillow 

Looking gift horses in the mouth

Chris Dillow

Chris Dillow
Looking gift horses in the mouth

'Run your winners' and 'never look a gift horse in the mouth'. Such old pieces of advice can sometimes cost us money. The collapse of Patisserie Valerie highlights this. It raises the question: why did investors, some of whom had big stakes and lots of experience – not notice the fraud? One possibility is simply that they weren’t looking hard enough. All of us have limited attention: we cannot trouble ourselves with everything. We therefore devote our efforts to what troubles us – investments that are losing money or that face clear dangers. If a business seems to be pootling along nicely, as Patisserie Valerie seemed to be doing for years, it’s natural to leave it alone and focus on other ones. If it ain’t broke don’t fix it.

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