Older, richer, savvier men more prone to biases

[HitandRun]

"After a long winning streak, (men) tend to believe they will consistently outperform the market and hence trade excessively," said the students, who polled 221 Singapore investors.

"Unfortunately, this leads to significant errors as they brush aside subsequent mistakes as aberrations."

Men also suffer more from the disposition effect, the survey has found. They sell winning stocks too soon and hold losing ones too long, leading to lower gains and larger losses.

I like confident people but I know life is rarely so black and white.

I would very much like to examine the data and methodologies employed as I would have imagined that such a study is fraught with significant challenges in interpreting the data.

First of all, how do they select the sample of 221 investors (selection bias)? Since they classify investors as man or woman, young or old, rich or poor, savvy or novice, the total permutations is 16. If so, average sample size for each category is <15? I will leave to fellow analysts to mull over whether such a sample size is meaningful.

The second point that I would like to make is that context is very important in assessing whether a share investment is successful or not. If one looks at OSIM's price chart for the past 10 years, depending on time frame taken and entry point, one could be a runaway success or abject failure. However, it is difficult to conclude within a short period of time (such as within 1-2 years time frame), whether a stock is considered a success or NOT.