Category: Investor Behavior Modification
Investor Behavior and Modification
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Investor Optimism Seems Excessive Again
When someone asks me why I hold so much cash or against a market decline, it always corresponds to extreme optimism readings in the most basic investor sentiment indicators. Investors have poor long-term results because they… Read More
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Each of us tends to think we see things as they are, that we are objective. But this is not the case. We see the world, not as it is, but as we are—or, as we are conditioned to see it. When we open our mouths to describe what we see, we in effect describe ourselves, our perceptions, our paradigms.”
– The Seven Habits of Highly Effective People: Powerful Lessons in Personal Change by Stephen R. Covey, Quote Page 28 (2004) Read More
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The U.S. Stock Market Trend
When we define the direction of a trend, we consider the most basic definitions. Higher highs and higher lows is an uptrend. Lower lows and lower highs is a downtrend. If there is no meaningful… Read More
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Extreme Fear is Now Driving Markets
On October 27th I wrote in Fear and Greed is Shifting and Models Don’t Avoid the Feelings that: The CNN Fear & Greed Index shows investor fear and greed shifted to Extreme Fear a month ago as the popular U.S. stock indexes dropped… Read More
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The public, as a whole, buys at the wrong time and sells at the wrong time. The average operator, when he sees two or three points profit, takes it; but, if a stock goes against him two or three points, he holds on waiting for the price to recover, with oftentimes, the result of seeing a loss of two or three points run into a loss of ten points.”
Charles Dow (November 6, 1851 – December 4, 1902) was an American journalist who co-founded Dow Jones & Company Read More
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Fear and Greed is Shifting and Models Don’t Avoid the Feelings
Investors are driven by fear and greed. That same fear and greed drives market prices. It’s Economics 101 “Supply and Demand”. Greed drives demand, fear drives selling pressure. In fact, investors are driven by the fear… Read More
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The four most dangerous words…
Every new moment is necessarily unique – we’ve never been “here” before. Probabilities and potential payoffs change based on the stage of the trend or cycle. For example, the current decline in stocks is no surprise, given… Read More
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The markets always go back up?
Someone recently said: “the markets always go back up!”. I replied: “Tell that to the Japanese”. The chart below speaks for itself. Japan was the leading country up until 1990. The NIKKEI 225, the Japanese stock… Read More
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Gold Isn’t Always A Hedge or Safe Haven: Gold Stock Trends Have Been Even Worse
For several years we often heard investors suggesting to “buy gold”. We could throw in Silver here, too. They provide many theories about how gold bullion or gold stocks are a “safe haven”. I’ve written about the… Read More
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The person who says it cannot be done should not interrupt the person doing it.
– Chinese Proverb Source: https://www.pinterest.com/explore/chinese-proverbs/ Read More