Comments on: Human Beings Are The Worst Traders In The World http://www.thefinancialblogger.com/human-beings-are-the-worst-traders-in-the-world/ This is where your finance takes place Wed, 07 Jan 2009 10:05:42 +0000 http://wordpress.org/?v=abc hourly 1 By: Stock Research http://www.thefinancialblogger.com/human-beings-are-the-worst-traders-in-the-world/comment-page-1/#comment-3283 Stock Research Sun, 14 Sep 2008 15:31:40 +0000 http://www.thefinancialblogger.com/human-beings-are-the-worst-traders-in-the-world/#comment-3283 Rich- Yes, this is correct. As you may know, Graham pioneered the value-oriented approach to stock investing and Buffet operates under this approach. It's about finding solid companies with strong earnings prospects that have wrongly fallen out of favor. Essentially, these value investors are looking to take advantage of the market psychology described above. Rich- Yes, this is correct. As you may know, Graham pioneered the value-oriented approach to stock investing and Buffet operates under this approach. It’s about finding solid companies with strong earnings prospects that have wrongly fallen out of favor. Essentially, these value investors are looking to take advantage of the market psychology described above.

]]> By: The Financial Blogger http://www.thefinancialblogger.com/human-beings-are-the-worst-traders-in-the-world/comment-page-1/#comment-3037 The Financial Blogger Wed, 20 Aug 2008 10:27:55 +0000 http://www.thefinancialblogger.com/human-beings-are-the-worst-traders-in-the-world/#comment-3037 Deamiter, Trying to assess millions of people way of thinking and their impact on the stock market sounds tough! I would prefer buying good companies or well managed funds and keep them regardless of the psychotic temper of the market ;-) Rich, You are right, Graham was Buffet's mentor. I wish he was my grandfather ;-) Deamiter,

Trying to assess millions of people way of thinking and their impact on the stock market sounds tough!

I would prefer buying good companies or well managed funds and keep them regardless of the psychotic temper of the market ;-)

Rich,
You are right, Graham was Buffet’s mentor. I wish he was my grandfather ;-)

]]> By: Rich http://www.thefinancialblogger.com/human-beings-are-the-worst-traders-in-the-world/comment-page-1/#comment-3030 Rich Tue, 19 Aug 2008 21:58:10 +0000 http://www.thefinancialblogger.com/human-beings-are-the-worst-traders-in-the-world/#comment-3030 Ben Graham's book is a classic- not easy to read, but it's very good. Isn't Buffet's entire investment strategy based off of that book? Ben Graham’s book is a classic- not easy to read, but it’s very good.

Isn’t Buffet’s entire investment strategy based off of that book?

]]> By: Deamiter http://www.thefinancialblogger.com/human-beings-are-the-worst-traders-in-the-world/comment-page-1/#comment-3026 Deamiter Tue, 19 Aug 2008 14:17:49 +0000 http://www.thefinancialblogger.com/human-beings-are-the-worst-traders-in-the-world/#comment-3026 Kind of an odd title since humans are the ONLY (financial) traders in the world... We're certainly not well-adapted to trading in large-scale markets, but that very trait in turn influences the markets and CREATES movement and trends. Individually, our aversion to and rationalization of losses can be negative individually to those who can't or simply don't care to take control of their emotions. However, as a whole, our emotional reactions are simply part of the human market. If you assume that markets rationally and efficiently value stocks, of course it will look like human emotions are bad. However, it is those same individuals who don't understand emotions, trade based on emotions and discount psychology in markets that make the mistakes you've mentioned. In short, it's not humans that are bad traders, it's humans that ignore humanity that make poor trades. Kind of an odd title since humans are the ONLY (financial) traders in the world…

We’re certainly not well-adapted to trading in large-scale markets, but that very trait in turn influences the markets and CREATES movement and trends. Individually, our aversion to and rationalization of losses can be negative individually to those who can’t or simply don’t care to take control of their emotions. However, as a whole, our emotional reactions are simply part of the human market.

If you assume that markets rationally and efficiently value stocks, of course it will look like human emotions are bad. However, it is those same individuals who don’t understand emotions, trade based on emotions and discount psychology in markets that make the mistakes you’ve mentioned. In short, it’s not humans that are bad traders, it’s humans that ignore humanity that make poor trades.

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