
The Battle Between Emotion and Reason in Financial Markets - Call-Levels
https://www.call-levels.com/blog/behavioral-finance-the-battle-between-emotion-and-reason/
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thyrsus
My favorite saying about markets is: "The market can stay irrational for
longer than you can stay solvent."

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curiousgal
Learned that the hard way trading Ether.

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icewater
Please elaborate on you Ether trading.

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kbody
Ether is being heavily manipulated for a long time by the Ethereum Foundation,
so having the "normal" altcoin/crypto speculation is enough to drive you nuts,
but having some a team of bag holders coordinated to manipulate price is a
"retail" trader killer.

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sremani
A good seller, sells to buyers emotions, a good buyers buys based on sellers
reasons (sort of).

Trying to come up with a one liner, I hope you get the gist. Seller should
have good EQ and buyers should be dispassionate.

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pjmorris
Only half of your equation, but how about Baron Rothschild's "The time to buy
is when there's blood in the streets."

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lintiness
or buffett, "be fearful when others are greedy, and greedy when others are
fearful."

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whack
The key takeaway that I got from this article: overcoming your emotional
biases as an investor is a full time job. If you're willing to spend 20+ hours
per week on this, more power to you. Otherwise, you'd be better off buying &
holding index funds for decades.

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adventured
The people that are best at at, are genetically wired for it. I'm one of those
people for example. It takes almost no effort for me to keep emotion out of
decisions on investments. I am extremely difficult to influence and have very
low susceptibility to the opinions of others. That has been the case since I
was young, I didn't have to learn anything to do it and I don't have to work
at keeping it that way. I watch in bewilderment as other investors routinely
fret, panic, get angry, get euphoric, in frequent wild swings with their
investments. They let the price and its movement dictate their emotion and
confidence in their decisions; they let the behavior of other investors
dictate how they calculate the value of the underlying business. One minute a
stock is $30 and two weeks later it's $22; at that point most people
emotionally think it's a disaster and start to panic, regardless of
consideration for the underlying fundamentals of the business. I got so
annoyed by the extreme emotionalism that rules most investors that I decided
to write a book on the subject, which I'm working on now (optimistically
hoping I can find something original to add to the numerous pre-existing
writings on the subject).

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whack
That actually sounds like an interesting premise for a book. If you ever
finish the book, or are looking for someone to read it and offer you feedback,
my email is listed in my profile.

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madiathomas
I am much happier when I have cold hard cash at the bank than when I am owning
shares. The moment I buy shares, I watch my portfolio like a hawk. My
happiness starts to depend on how the portfolio is doing. When the numbers go
down, my happiness level drops. Vice versa. It becomes an obsession.

Instead of thinking about coding and other things that occupies my thoughts on
a normal day, I start to think about markets when showering, sleeping, eating,
driving etc. When I am investing in index funds, I don't experience such.
That's why I only invest in index funds these days.

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SonicSoul
Nothing too surprising here. It's like when you play poker you're playing the
other players, not your cards against their cards. Same cards can win or lose.

Curious what will happen when general intelligence becomes better at managing
money than humans + supervised algorithms . I am guessing volatility will drop
with less chance of flash crashes. And will be able to better judge a company
performance based on their stock . Right now none of that is 'rational'.

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partycoder
Financial markets depend on how much value we assign to things, and that's
very subjective and at times, irrational.

That's the reason Kim Kardashian is richer than Woz.

