Mental Tricks/Mnemonics for Behavioral Investor Types (BITs)?

CFA Level III Portfolio Management
#1

Does anyone have any tips or mental tricks for knowing the biases and definitions of the Behavioral Investor Types (BITs)?

Most common emotional biases exhibited:

  • Passive Preserver: Endowment, loss aversion, status quo, regret aversion.
  • Friendly Follower: Regret aversion.
  • Independent Individualist: Overconfidence, self-attribution.
  • Active Accumulator: Overconfidence, self-control.

Most common cognitive biases exhibited:

  • Passive Preserver: Mental accounting, anchoring and adjustment.
  • Friendly Follower: Availability, hindsight, framing.
  • Independent Individualist: Conservatism, availability, confirmation, representativeness.
  • Active Accumulator: Illusion of control.

Thanks!

#2

Too much details. All you need to know is the bottom and top town, the extremes are commonly emotional biases and are on the extreme of passive/active and on the extreme of risks (low tolance vs high tolance)…

The middle two are inbetween and primarily cognative biases.

They story wont be so tricky to say the guy has endowment and ancholoring… what BIT is he… lol…

More likely, If theres a question, they will say he’s risk-averse and has emotional biases, what BIT is in.

#3

#4

If somebody earned their wealth through steady and regular high compensaiton at work

Is he active on the barnewall 2 way model? (that’s what my notes say)

But he is conservative (passive) according to pompian?

Is this right?

#5

Like 125 said, just remember the extremes.

If I gotta memorize that whole chart to pass this exam, I’m ok with being a peasant.