[[Start here]] → [[manage the monkey mind|Mindset]] → Information and Habits --- ![[information-behaviour.png]] Giving people information about “how to be a successful investor” is not enough to change behaviour. The web is full of education. Amazon is full of books written by the best investors of all time. We’re overloaded with great advice. Still we falter and make the same mistakes: - Picking story stocks. - Betting too big. - Holding onto losers. I write about this all the time, but still fall into the same traps. We have to ask ourselves why. It’s not enough to have the information. It’s not enough to have a plan. We need a plan to implement the plan. And that plan starts with behaviour change. The science of behaviour change is well documented. We’re swimming in books like “The Power of Habit”, “Atomic Habits” and “Tiny Habits”. They all have great advice. More great information. But again, generic information on “*how to change habits*” doesn’t make it any easier to identify the positive habits required for successful investing and the negative habits we need to rid ourselves of. That’s where the hard work starts. It starts with self awareness. There’s a great [[Nelson - there's a hole in the sidewalk|poem by Portia Nelson]] that summarises the journey towards habit change. We walk down a street and fall down a hole. We do it again and again even though we know it’s there. Eventually we walk around it, then find another street. It takes time. Can you accelerate this process? Yes. There are some simple starting points. Firstly, start keeping a journal. A digital journal is fine. Most people use a notes app. I use the beautiful [Bear](https://bear.app/) on a Mac. Whenever you are thinking of making an investment, write down your reasons why before you pull the trigger. We often find writing things down hard. Make it easy to do this. Create a template to fill in. Better than this, create a checklist of rules that each new investment should qualify for. If you’ve already placed a deal before making a note, don’t berate yourself. You’ve fallen down the hole. It’s ok. Write the journal note anyway. Review your decision against your [[use a checklist to improve decision making|checklist]]. Review what led you to the behaviour. Reflect. BJ Fogg founded the Stanford University Behavior Design Lab and wrote “Tiny Habits”. He states that there’s only three ways to change behaviour. Have an epiphany, change your environment or change your behaviour in tiny ways. Make negative habits more difficult. Make positive habits more easy. When we reflect on our behaviour, we often find that negative habits are driven by our environment. So start there. * What drove a spontaneous sell order? Was it random fluctuations in price? Are you looking too often? What makes you look so often? Was it Twitter? Was it because you have trading apps on your iPhone? Are these apps really helping you? Can you make it more difficult to trade? * Why did you place a spontaneous buy order? Ask yourself what drove the FOMO? Again, some of the usual suspects may appear. * What makes you have such huge confidence in your biggest position? If [[more information increases confidence in forecasts, not accuracy]], think about what needs to change. Maybe there’s a habit you’ve developed of continually searching for positive information on that stock. How can you avoid that? The epiphany that I had that led to a significant rethink on my approach was that [[simple rules beat human judgement]]. After reflecting on some of my significant losses I realised that over-confidence led to over-attachment and an inability to sell at opportune times. I endeavoured to become more rules-based in my approach. I am still seeing the hole in the street. I know it’s there. I have the information. I am falling into it less often. One day I’ll walk down the other street. Every time.