Mohnish Pabrai participated in the “Talks at Google” series in 2017, sharing his insights into deeply entrenched biases and our flawed evolutionary brain, which make us prone to make plenty of mistakes when picking stocks.
Specifically, the more time we spend analyzing a given business, the more likely we are to like it and invest in it. But if we don’t spend time studying a business, how are we expected to understand its prospects and likely future? This strong commitment bias is an important reason why most investment managers have trouble beating the index. Mohnish laid out the origins of this bias problem and shared a few “hacks” to get around it.
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