(Harvest) Conviction is a necessary quality for any investor – lack thereof can lead to an inability to stay the course on a successful contrarian investment. Yet without flexibility investors can easily fall prey to various behavioral biases such as anchoring and overconfidence and fail to correctly change their minds when the evidence merits doing so. The ability to properly navigate the tension between conviction and flexibility is one of the distinguishing traits of superb investors. This article explores the question of when we should stick with our convictions and when we should be flexible and change our minds.
Balancing Conviction and Flexibility in Investing
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