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RupeeCase notes . Topic

Behaviour

The biases that cost investors money, and the market plumbing (settlement, circuit breakers, flows, stop orders) that catches them on the worst day.

  • 27notes in this topic
  • 6to read in order
  • 3questions answered

01Read in this order

Six notes that carry the idea.

  1. 01Ten days that mattered8 min .
  2. 02The default decides more than the advice does10 min .
  3. 03The behaviour gap: fund return vs investor return5 min .
  4. 04Your portfolio is not down. You are looking too often.12 min .
  5. 05A stop loss is not a floor. It is a request.10 min .
  6. 06Selling the wrong half10 min .

02Every note

27 notes, newest first.

  1. A stop loss is not a floor. It is a request.A stop is a trigger plus whatever fill exists, and in a 20 percent gap a 5 percent stop left 75 percent of the damage uncontrolled while circuit rules queued the exit. . 10 min
  2. The default decides more than the advice doesMissing three instalments a year on a Rs 10,000 SIP cuts a twenty year corpus by 23.9 percent, and a skip in month one costs 9.7 times a skip in month 229. . 10 min
  3. Selling the wrong halfTwenty equal positions with winners sold at plus 20 and losers held to minus 40 end down 10 percent; flip the exit rule and the same picks end up 10, and doing nothing ends flat. . 10 min
  4. Your portfolio is not down. You are looking too often.At 12 percent drift and 18 percent volatility a day's wobble is 24 times the signal, a normal year shows about 121 red days, and the crossover sits at 2.25 years. . 12 min
  5. Ten days that matteredRs 10 lakh in the Nifty 50 TRI from July 1999 grew to Rs 2.84 crore, or Rs 96 lakh without the 15 best days, seven of which sat within two weeks of the ten worst. . 8 min
  6. Confirmation bias: research or hopeLord, Ross and Lepper's 1979 study showed mixed evidence hardens both sides, and cutting at minus 15 instead of holding through minus 40 ends Rs 3.51 lakh ahead on Rs 10 lakh. . 7 min
  7. The disposition effectOdean found investors 1.5 times more likely to sell a winner than a loser, and the winners they sold beat the losers they kept by 3.4 points over the next year. . 8 min
  8. The settlement cycleIndia moved to next day settlement in January 2023, sixteen months before the US, and optional same day settlement now covers the 500 largest stocks. . 6 min
  9. Doing nothing is the skillKeepers who stay in the centre save about a third of penalties and dive anyway; the investor who sold a 30 percent fall and bought back higher ended with 3,000 fewer units. . 5 min
  10. Risk tolerance is a moodGuiso, Sapienza and Zingales found risk aversion rose sharply after 2008 on fear rather than wealth, so ask the drawdown question in rupees, not percentages. . 5 min
  11. The behaviour gap: fund return vs investor returnIndian equity funds returned 19.1 percent a year from 2003 to 2022 while the rupees investors actually put in earned 13.8, and SIP investors earned 15.2. . 5 min
  12. Myopic loss aversion: the price of lookingAn index that climbs over the long run still closes red almost half of its days, about 2 in 5 months and 1 in 4 years, and a loss stings about 2.25 times a gain. . 5 min
  13. Impact cost: zero brokerage was never zero costA Rs 1 lakh round trip costs about Rs 100 of spread on a liquid Nifty name and about Rs 4,000 on a thin small cap, and neither appears on the contract note. . 5 min
  14. Pausing a SIP in a downturn is the most expensive instinctOn identical money and the same exit, the investor who kept buying through a 40 percent fall ended with 329 more units and Rs 39,471 more than the one who paused. . 5 min
  15. Overtrading and overconfidenceBarber and Odean's most active fifth of households earned 11.4 percent a year against a market at 17.9, and the trading itself was the cost. . 6 min
  16. Missing the best daysSitting out the ten best days in twenty years cuts Rs 96 lakh to Rs 47 lakh on Rs 10 lakh at 12 percent, and those days cluster inside the worst weeks. . 5 min
  17. Why your sell is not cash yetIndia settles at T plus one trading day, so a Friday sale lands on Monday and a sale before a long weekend can take five calendar days to become spendable. . 5 min
  18. The day the market did not let you sellA 10 percent index move halts the whole market, and a lower circuit means the bids have vanished, which is why position size and not the exit plan is the real protection. . 5 min
  19. The IPO pop is not the businessIn 2025, 65 of 100 mainboard listings opened above issue price and 59 of 100 traded below their listing by December, because the grey market prices the first hour, not the first year. . 6 min
  20. By the time the group agrees, the trade is finishedA momentum strategy's time weighted 16.7 percent CAGR became about minus 4.9 percent money weighted, because the crowd arrived the year after the 72 percent print. . 5 min
  21. Sunk cost: the first loss is the cheapestA 35 percent hole needs 54 percent to climb out, and a Rs 65,000 rump held flat for three years forgoes about Rs 30,000 against cutting and redeploying at the index. . 5 min
  22. Recency bias meets factor crowdingA model basket up 60 percent on a trailing return screen is a momentum tilt with a friendly name, and the same factor has lost 28, 21 and 19 percent in its three crashes. . 6 min
  23. FII flow: signal or noiseThe day FII turned buyer and DII turned seller the Nifty slipped 0.13 percent, because a flow print is a record of yesterday and never a verdict on tomorrow. . 5 min
  24. Mental accounting: the bonus that feels differentThaler's mental accounting explains why a Diwali bonus gets spent and a salary SIP never misses, and a Rs 2 lakh splurge carries a thirty year bill of about Rs 60 lakh. . 5 min
  25. Who told the stock your buy priceOdean's 1998 study found investors cut winners 51 percent faster than losers, and a Rs 1 lakh position left flat for five years forgoes Rs 76,234 of compounding. . 5 min
  26. Stops set by feel, not by mathA 10 percent trailing stop on an ordinary large cap gets hit four to six times a year by normal weather, and each forced round trip costs about 0.30 percent. . 6 min
  27. FII flow is a sentence, not a verdictFII sold Rs 1.92 lakh crore of Indian equity in four months of 2026 while the Nifty sat 7.6 percent off its high, because DII and the SIP book were the bigger buyer. . 5 min

03Go deeper

From the notes to the course, and to the cards.

Learn path 3The free Learn course on the same ground, with a certificate at the end. 18 index algosEvery RupeeCase strategy, model back tested, in your own demat. All eight topicsBack to the hub: reading paths, search and the latest notes.

04Questions, answered with figures

Three questions readers ask about behaviour.

Should I pause my SIP when the market falls?

The numbers say no. On identical money in and the same exit, the investor who kept buying through a 40 percent fall ended with 329 more units and Rs 39,471 more than the one who paused and bought back at full price. Read the note: Pausing a SIP in a downturn is the most expensive instinct

How often should I check my portfolio?

At 12 percent drift and 18 percent volatility a single day's wobble is about 24 times the signal, a normal year shows about 121 red days, and the expected move only overtakes the swing after about 2.25 years. Pick a quarterly window before you buy. Read the note: Your portfolio is not down. You are looking too often.

Does a stop loss cap my loss?

No. A stop is a trigger plus whatever fill exists. In a 20 percent overnight gap a 5 percent stop left 75 percent of the damage uncontrolled, and a 20 percent index move ends the session with the order still queued. Read the note: A stop loss is not a floor. It is a request.

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