Bottom line. Three behavioral flags fired on the biased trader. Math detected; coach narrates. Primary risk: holding losers below cost while churning winners.
Disposition: FLAGGED Overconfidence: FLAGGED Anchoring: FLAGGED
Diagnosis
The portfolio exhibits a combined pattern of cost-basis anchoring, overconfidence / excess turnover, and no-disposition discipline. The manager is sustaining a single-path synthetic portfolio (GBM + event shocks) with reluctance to crystallize losses. Decisions appear tethered to purchase cost basis, with no realized losses in the sample period. Trading intensity is elevated (turnover ≈ 6.27 ann.) relative to a disciplined baseline, without a corresponding increase in risk-adjusted results (Sharpe 1.13). High underwater share with zero sells below cost points to get-even holding beyond policy tolerance.
Intervention
Prohibit “get-even” holds: once a position is below cost basis beyond policy tolerance, require a documented re-underwrite or exit (current sell-below-cost rate 0.00% with underwater share 63.42%). Cap gross turnover below the current ≈ 6.27 ann. and require a written edge thesis for any re-entry within five sessions of a profit-taking sale. Risk committee should review this scorecard within five business days and report policy changes on cost-basis anchoring and turnover discipline.
Scorecard metrics cited
| Metric | Value | Read |
|---|---|---|
| PGR | 0.0462 | Proportion of gains realized |
| PLR | 0.0000 | No losses realized in sample |
| Disposition ratio | inf | RL = 0; strong disposition form |
| Turnover (ann.) | 6.27 · High | Excess churn vs baseline |
| Sharpe (ann.) | 1.13 | Does not clear overconfidence flag |
| Underwater day share | 63.42% | Cost-basis stickiness |
| Sell-below-cost rate | 0.00% | Zero exits below anchor |
| Total return | 10.52% | Positive P&L does not clear bias flags |
Design rule Coach may only narrate fields on the scorecard. Bias existence is decided by the deterministic evaluator, not the LLM.