When discussing how to invest in the stock market, the professionals often sound as though they are dishing out relationship advice. “Know when to move on from things that have been really good for you,” one advises sagely. “Don’t make big decisions in a heightened emotional state,” another adds. “And don’t fall in love,” concludes an industry veteran (to confirm, he is warning against companies rather than people) .
Stock picking, it is clear, requires emotional vigilance as well as intellectual nous, just as behavioural finance would suggest. Even the smartest asset managers slip up, however, and there is plenty to be learnt from their mistakes. Starting with…