Are market experts prone to heuristics, and if so, do they transfer across closely related domains—buying and selling? We investigate this question using a unique dataset of institutional investors with portfolios averaging $573 million. A striking finding emerges: while there is clear evidence of skill in buying, selling decisions underperform substantially—even relative to random selling strategies. This holds despite the similarity between the two decisions in frequency, substance and consequences for performance. Evidence suggests that an asymmetric allocation of cognitive resources such as attention can explain the discrepancy: we document a systematic, costly heuristic process when selling but not when buying.
This conference looked at whether the COVID crisis has had a pervasive impact on the investment landscape in the short and long term, and asked delegates to question whether some of the investment assumptions used in the past are still applicable in the future. It also looked at the influence of the COVID crisis as an accelerator for certain key themes driving markets; examined the way business is conducted and decisions are made; and tried to predict the impact of technological innovation on businesses, the way we work and the future of the global economy. Importantly it challenged investors to think about what needs to change, and hasn’t yet, and how the crisis can be a catalyst for new and improved business practices and investment allocations.