Some Illustrations of Reflective Thinking in Investing

This makes reflection a key application in basic analysis. In this technique, the investor is particular and keen to study the information of a company's financial statement, management, position of an industry, and pertinent data for estimating its intrinsic value. It is essentially a decision-making process done deliberately and not on instinct or market sentiment
Reflective thinking in risk management is also important. An investor, assuming reflective thinking has calculated several scenarios and risks that involve a particular action, diversification, asset allocation, and hedging strategies amongst others. It will provide the investor with information to manage uncertainties by seeing their long-run goals and level of risk that they are able to handle.
This will end into contrarian investment, making decisions that run contrary to the overall mood of market perception by investor. This style calls for careful thinking and resisting impulses to swim along with an exuberant or despairing crowd.