Strictly: Drilling II Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Strictly: Drilling II

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Frank Pembleton who started this subject	6/7/2002 8:20:12 AM
From: Frank Pembleton	of 36161

Psychological Exuberance Interview by Donna Guzik Overconfidence and wishful thinking are psychological factors that influence investors and contribute to the formation of a bubble in the market says Yale University Professor of Economics Robert Shiller Summary Shiller is the author of "Irrational Exuberance" a book which discusses the psychological factors that play a role in market activity. Factors such as overconfidence, magical thinking and selective attention are all factors that influence investor behaviour. During a bull market people enter the market because that's what everyone else is doing. The level of attention paid to the market goes up, and people's investment knowledge and expertise go up, and it becomes a part of a cultural identity for groups. A bull market becomes a fundamental and cultural shift in society, almost as though it were "in fashion" to be invested in the market. People can become consumed and wrapped up in the hype of a rising market. The media plays a significant role in not only providing information but drawing attention to reaction in the market. Buying low and selling high is what you want to do but most investors aren't able to do that. As a speculative bubble progresses, profits that early investors receive attract more attention. The last ones to buy in are usually the ones who were initially reluctant to do so, but after years of watching people make money they decide to buy in. That's the worst time to invest because at that point the bubble could be over. People tend to abandon common sense at times during bull market, just like they abandon common sense when they gamble or buy lottery tickets. Wishful thinking is an important influence on human behaviour, people have the tendency to believe that their investment efforts will win. Accounting scandals have the potential to cause some real mistrust in the market. Most investors haven't realized that there's something fundamentally wrong with accounting procedures. We have to take steps to make sure accounting steps are cleaned up. investorcanada.com

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next