Comments on: The Psychology Of Investing In Stocks http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks/ Value Investing Blog Mon, 16 May 2011 10:55:06 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Joe Ponzio http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks/#comment-607 Joe Ponzio Tue, 23 Oct 2007 17:11:51 +0000 http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks#comment-607 I love to play poker. In poker, just as with investing, the cardinal rule is: Make the right decision, regardless of the outcome. In the long run, you'll win a lot more than you'll lose. If DFC was a screaming buy at $9, and the business and outlook hasn't changed, you'd be silly to sell at $5.38 - and would probably be right to buy more. I love to play poker. In poker, just as with investing, the cardinal rule is: Make the right decision, regardless of the outcome. In the long run, you’ll win a lot more than you’ll lose.

If DFC was a screaming buy at $9, and the business and outlook hasn’t changed, you’d be silly to sell at $5.38 – and would probably be right to buy more.

]]> By: MikeR http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks/#comment-601 MikeR Tue, 23 Oct 2007 08:18:14 +0000 http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks#comment-601 mm, I can't, at least not yet! mm,

I can’t, at least not yet!

]]> By: mm http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks/#comment-599 mm Tue, 23 Oct 2007 06:17:09 +0000 http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks#comment-599 The right state of mind in the short term is wishing the stock going down. Because it let you buy some more and demonstrate your belife in previose assumptions. The worest enemy is yorself. Pabrai bought DFC around 9$,now it is 5.38$ and he increas his stake. Can you do the same? The right state of mind in the short term is wishing the stock going down.

Because it let you buy some more and demonstrate your belife in previose assumptions.

The worest enemy is yorself.

Pabrai bought DFC around 9$,now it is 5.38$ and he increas his stake.

Can you do the same?

]]> By: Lester Golden http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks/#comment-421 Lester Golden Mon, 08 Oct 2007 10:53:15 +0000 http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks#comment-421 Selling lots of good ideas too early (CPL, SDA, TKC...) eventually leads to self awareness of the addiction to activity. So I channel this activity into options and currency trading with a small amount of play money. Small risk and big thrills which doesn't touch the value/buy and forget about it part of a portfolio. Socrates said: know thyself. The difference between perceived and real risk (another way of saying high uncertainty, low risk). Eastern European real estate from the 1990s until now. Japanese and Malaysian real estate now. Selling lots of good ideas too early (CPL, SDA, TKC…) eventually leads to self awareness of the addiction to activity. So I channel this activity into options and currency trading with a small amount of play money. Small risk and big thrills which doesn’t touch the value/buy and forget about it part of a portfolio.

Socrates said: know thyself.

The difference between perceived and real risk (another way of saying high uncertainty, low risk).

Eastern European real estate from the 1990s until now.

Japanese and Malaysian real estate now.

]]> By: Joe Ponzio http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks/#comment-374 Joe Ponzio Tue, 02 Oct 2007 13:09:48 +0000 http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks#comment-374 I think most investors would benefit greatly from a change in perspective. The problem (for most) is not that their strategy is wrong, it is that they do not fully understand the markets and that these "stocks" are companies. Sure, you can say it until you are blue in the face; still, most people don't know what that means. If you do not fully comprehend the markets, you can't possibly have a strategy that works consistently - either as a gambler or as a business investor. I think most investors would benefit greatly from a change in perspective. The problem (for most) is not that their strategy is wrong, it is that they do not fully understand the markets and that these “stocks” are companies. Sure, you can say it until you are blue in the face; still, most people don’t know what that means.

If you do not fully comprehend the markets, you can’t possibly have a strategy that works consistently – either as a gambler or as a business investor.

]]> By: Martin http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks/#comment-371 Martin Tue, 02 Oct 2007 07:35:18 +0000 http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks#comment-371 I think the psychological aspects of investing are much under appreciated. We all feel comfortable with analysis and the perceived "science" of the investment process. And yet it is the occasional "madness" of the markets which present the greatest opportunities. I think people like Buffett, Pabrai and others are great investors as much as because they simply have their heads firmly screwed on as any other reason. Focus, coolness, the right balance of confidence vs arrogance and independence of mind are key qualities. I think the psychological aspects of investing are much under appreciated. We all feel comfortable with analysis and the perceived “science” of the investment process. And yet it is the occasional “madness” of the markets which present the greatest opportunities. I think people like Buffett, Pabrai and others are great investors as much as because they simply have their heads firmly screwed on as any other reason. Focus, coolness, the right balance of confidence vs arrogance and independence of mind are key qualities.

]]> By: Lethe http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks/#comment-270 Lethe Sun, 16 Sep 2007 16:05:02 +0000 http://www.fwallstreet.com/article/57-the-psychology-of-investing-in-stocks#comment-270 Very good analysis on common investors' mind. Serenity is indeed a very difficult stage to reach, somwhat like Zen. So I wonder, isn't that Buffett is like a Zen monk? Very good analysis on common investors’ mind. Serenity is indeed a very difficult stage to reach, somwhat like Zen. So I wonder, isn’t that Buffett is like a Zen monk?

]]>