APPENDIX K
Antivaluation! Human Valuation and Investment Foibles
BEFORE VALUING A company, investors need to evaluate themselves. Are they avoiding tricks of mind that compromise investment choices? To avoid faulty reasoning, it is a good idea to check for valuation bias and fallacy.
Slanted or illogical thinking can undo all the good that objective, reasoned valuation can accomplish. Indeed, one reason investors use indexes for stock choices and algorithms for trading moves is to restrain human impulses.
But rather than avoid their personal natures, perhaps investors can improve and use them. So to that end, here is an alphabetical list of investment foibles (some biases, some fallacies) to avoid.1

Some Common Biases in Valuation Choices

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