Mahdi

The problem for the portfolio managers has an obvious solution. They need to track their selling decisions as rigorously as they are tracking their decisions to buy. Traders sometimes create shadow books of the things they were thinking about buying but didn't, to track how those decisions might have gone. A solution I've recommended to clients working in financial markets is to use the same strategy to solve the feedback problem on sell-side decisions. Create a book that tracks those sell-side decisions and see how they're doing compared to a benchmark of how they would have done if they randomly sold something different in the portfolio at the same time.