Thoughts and observations for those investing on their own or contemplating doing it themselves.
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Monday, October 4, 2010
A Creative Artist
CLICK TO ENLARGE Many times the best way to get a message across is with humor. Here is the most popular cartoon by perhaps the greatest ever political/business cartoonist Kevin Kallaugher, aka KAL.
This cartoon, first shown on the cover of "The Economist," is his most popular. It generated an inordinate number of comments, many from traders who said it reflects the mood on the floor of the exchanges. DOES THIS SCARE ANYBODY ELSE?
If you've ever been caught up in emotions in your investing, or if you have ever acted on an investment tip, you can relate. If you go into the company lunch room and overhear a fellow worker say that their fund XYZ is really doing well, and then you go out and buy it, then you can relate to this cartoon. I know - I'm stretching here - none of you have ever done anything of the sort.
Here's an interesting background video on KAL
Posted by Robert Wasilewski at 8:10 AM
Labels: DIY investing
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That is a classic cartoon, and maybe even more true today than when it was drawn.ReplyDelete
I love the cartoon. Emotions definitely play a big part in investing, and perhaps learning to control these emotions and using them to your advantage makes the difference between success and failure. I have also made my fair share of emotionally-driven errors.ReplyDelete
re: Kevin As we all have. It is part of the tuition.ReplyDelete
It doesn't scare me though. It excites me. Since I focus strictly on the long-term and the fundamentals of the business, I like erratic stock behavior because it gives me plenty of opportunities to buy quality companies on the cheap.
Sometimes I've had to learn the hard way, though. Especially when starting out, emotions definitely played a big role in my investing mistakes.
I have been caught up with emotion myself, especially when it came to selling a stock. I would hear a rumor, worry about all the negative reaction, and sell it instead of holding out.ReplyDelete
As I have gotten older, I have gotten off the rollercoaster. I monitor my investments, but I try to remember that if the fundamentals still hold, then I need to hold on to it.
That's why it's so hard to try to make rational decisions on analyze the stock market. It's hard to quantify emotions.ReplyDelete
re: Sandy To me it is a pretty basic decision. If you can't be unemotional about your investments then hire a professional to do the job. Otherwise you will always be buying high and selling low. A professional can get you on track for a disciplined investment approach that intelligently manages risk with a view to the long run.ReplyDelete