Human nature
After investment failure, most investors have never been able to accept the fact that “Investing is not voting” or “Negative message is part of investment” After all, this is human nature and few can overcome it.
But hope does not necessarily happen. Expectation is an imagination that may not come true. Reality and expectation are always two ends of the scale.
An optimistic personality is good in life, but it is not a help in investing, nor is it one of the necessary traits for successful investors.
Wishful thinking
Human psychology seems to require a spirit of false encouragement to mask the uncertainty inherent in investment decisions. In his book “Where are the customer’s yachts?”, Fred Schwed wrote a classic comment about Wall Street: “It seems that the immature mind has a regrettable tendency to believe, as actually true, that which it only hopes to be true.”, In this case, “the idea that financial futures are unpredictable is so unpalatable that it loses its place in the consciousness of Wall Street people. “
Robert Shiller, winner of the 2013 Nobel Prize in Economics and author of the book “Irrational Exuberance” said: “Another reason that the differences between professionals’ performance and the market’s performance are small is that institutional investors believe they must have reasons for what they do,
reasons that can be justified to a committee. They feel they do not have the authority to make trades in accordance with their own best judgments, which are often intuitive. Their obeisance to conventional wisdom hampers their investment performance.”
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Whistle to courage
Keynes agreed that this kind of fake correctness is like whistling in the dark to embolden the stock market. “It is nothing more than making us feel calm and comfortable. We deliberately hide how ignorant we are about the future.”
Keynes has a famous saying that applies here: “We just don’t know what the future holds.”
Time will tell
Keynes said in his masterpiece “The General Theory of Employment, Interest, and Money“: “Skilled investment has a social purpose, which is to defeat ‘time’ and ‘ignorance’ “These two dark forces cloud the future.”
Conclusion
George Church: “Each decade has its own peculiar folly, but the essence is the same: the conviction that what has happened recently will continue into the future, even if the sky falls.”
The trick is to differentiate between what ＂you want to＂ happen and what ＂you know＂ will happen.
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- “Investing is not voting“
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