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Mental Blocks and not listening to instincts
Old 06-29-2007, 12:45 PM   #1
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Mental Blocks and not listening to instincts

I was typing and wanted to shut down a bkgd. program but quit Safari instead by mistake. I managed to get a screen grab so I will try to attach it and to wrap up subsequently. Apologies if it has gross typos or problems with how the paragraphs flow.
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Old 06-29-2007, 12:52 PM   #2
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What a pain! Too bad I don't have an OCR program.
------
Anyway.. I don't worry about not having bought Widgets, Inc. that had a 300% runup. Not at all.

What I worry about is what holds me back from stocks I like, I think I understand, I even do financial research on, and then.. I never buy. I just THINK about buying them. And then they go up. A lot in this case.

Why don't I trust myself?
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Old 06-29-2007, 01:39 PM   #3
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Why don't I trust myself?
I think it's hard to draw the line between investing and investor psychology...
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Old 06-29-2007, 01:46 PM   #4
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I do the same thing sometimes. I just bought more of something today that I have done endless amounts of research on, spoken with the company president, know the industry, am well versed in the business and regulatory structure, etc. Yet I struggle mightily to pull the trigger and add to my position as it sells off. I did it, this time. But it is tough, especially when there are oodles of people saying how bad the company is, that they are ging down the drain, etc. I don't really have an answer for you, but even though I do this for a living it is not easy.
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Old 06-29-2007, 02:03 PM   #5
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I was typing and wanted to shut down a bkgd. program but quit Safari instead by mistake.

So I guess that 'ease of use' thing is really working out for you then?

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Old 06-30-2007, 03:33 AM   #6
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HA! It was a slip of the finger... AND I got my text back so now you can read it painlessly in all its glory:

Quote:
or... why I didn't buy AAPL.. ever.
(offshoot from the iPhone thread)
----
It's not only a question of buying Apple per se.. it's being frustrated with not trusting my instincts.

But AAPL is frustrating in particular because using Apple products dally gave me a sense of the inherent worth of the company distinct from the comings and goings of the various dot-coms and Enrons.. I've thought about buying probably once or twice a year since the early '90s. My sis bought when they were selling for not much more than their cash-on-hand. I guess it was the lack of dividends and signs of a company that was even going to really survive --when Jobs was out it seemed on the ropes completely. I guess I drank the PC Kool-Aid that Apple was, and always would be, a struggling underdog; observing David and Goliath, the smart money would not be on David.

I also over-compensated for my love of Apple products; I didn't want to risk being 'blinded' by It, so I refrained and sat on the sidelines.

One time I did trust my Instincts and bought DeWoIfe (a RE agency). I didn't even look at "1010Qs" or anything. I bought soon after the IPO and Inside of a year I had made an annualized 167% according to Quicken, as It got bought out by a bigger agency. Why did I buy it? Only because it had almost all the really high-end listings In the Boston area.. kind of a mlnl-Sotheby's.

In the Apple case, I knew the Inherent worth by a combination of personal experience and Instinct rather than studying SEC documents. I know it's very cliched and watered-down-Peter-Lynchian and all. I particularly don't want to put this In the same class as detailed yet abstract financial Instincts like " I think the yen will rebound, yet soybean futures options will crash, and this should reflect in a net uptick in the Kikkoman PEG ratio .

Lynch's job was to go around and look for these kinds of opportunities and he was also savvy enough to look at trends and co. financials and he had an entree with mgmt. that the average Investor will never have. That's why his book was kind of ridiculed: the hard work and access were not something the average person could replicate, yet he was selling an 'accessible' investment book for the average joe/jane.

---
My stocks don't keep me up at night; I can count yearly trades on 2 or 3 fingers, much less a whole hand. Usually it is buying, not selling. I've posted my portfolio here and it is pretty much unchanged.

I don't get myself upset about the money. I didn't and don't need It. Which is probably what makes me such a lazy investor. I don't worry about not having bought Widgets, Inc. that had a 300% run-up. Not at all.

What I worry about is what holds me back from stocks I like, I think I understand, I even do financial research on, and then.. I never buy. I just THINK about buying them. And then they go up. A lot in this case.

Why don't I trust myself?
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Old 06-30-2007, 12:28 PM   #7
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I think people go with ETFs and funds for the same reasons that they fly on airlines. It is too complicated to do it themselves. A very small number of people feel the same way about driving cars.

My first few flyers, going against the herd, were akin to asking the girl to dance in high school. Fear of failure and looking stupid. But once a few of them said yes and it worked out, the fear went away. Like riding a bicycle. There is no substitute for hands-on positive experience.

(Bought AAPL at $13, sold 900 at $78, still holding 300. Never used an Apple product, although I held an iPod once.)
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Old 06-30-2007, 04:06 PM   #8
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Why don't I trust myself?


Often it is because someone important and powerful in your early life may have had high expectations of you, but also have been critical or overly demanding or perfectionistic.

This can set us up for a fear of failure.

Ha
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Old 07-02-2007, 03:47 PM   #9
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Often it is because someone important and powerful in your early life may have had high expectations of you, but also have been critical or overly demanding or perfectionistic.

This can set us up for a fear of failure.

Ha
What a great board free stock picking advice and free pyschoanalysis
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Old 07-02-2007, 04:13 PM   #10
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What a great board free stock picking advice and free pyschoanalysis
And both are usually worth what you paid for them...

Actually, I think Ha was insightful. But I am thinking that the lack of confidence in one's analysis is more general to all of us in posession of "monkey" brains. The crucial lesson of behavioral finance is that you have to make investing decisions on the basis of rational, cold, intellectual thought and force yourself to over-rule your emotional reactions.
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Old 07-03-2007, 11:22 AM   #11
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...The crucial lesson of behavioral finance is that you have to make investing decisions on the basis of rational, cold, intellectual thought and force yourself to over-rule your emotional reactions.
Just like that first bungee jump or skydive.
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Old 07-03-2007, 11:25 AM   #12
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Just like that first bungee jump or skydive.
Nah, not at all alike. People who do THAT stuff are nucking futs.
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Old 07-03-2007, 11:37 AM   #13
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Often it is because someone important and powerful in your early life may have had high expectations of you, but also have been critical or overly demanding or perfectionistic.

This can set us up for a fear of failure.

Ha
Ha, I'm in love with your avatar.
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