One of our subscribers today (dangersimpson ) sent me a marvellous piece of research by Michael Mauboussin entitled “Managing the Man Overboard Moment – making an informed decision after a large price drop”. The insights contained in this piece hold some great lessons for all stock market investors. He shows how to decide whether to buy, sell or hold stocks that suffer from negative news and 10% price drops by analysing just a few key factors of a stock which will be strikingly familiar to Stockopedia subscribers.For those who don’t know Mauboussin, he’s the Head of Global Financial Strategies at Credit Suisse and a prolific writer – his several books on skill, luck and decision making come highly recommended. We admire him due to his rigorously rational, data driven amp; analytical mindset – the kind of mindset we believe investors should all apply to stock markets in preference to intuition or gut instinct.The power of the checklist investorMauboussin begins his paper by explaining that the key to successful investment is keeping emotions in check when facing adversity. Days when widely held stocks…
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