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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Mike Buckley who wrote (20174)3/14/2000 9:58:00 PM
From: BI*RI  Read Replies (1) of 54805
 
One thing Buffett does have a handle on is the psychology of investors. Research he reports reveals that investors react much more emotionally to losses than gains. And they are more likely to remember significant losses than equal gains.

Several posts today are examples of this observation. Market gyrations, significantly "up" days typically receive little mention here. While a poster might occasionally mention that stock "X' is doing well on a given day, this thread avoids the day-to-day stock price watch common on other threads. Interesting though, that today's sell-off prompted many reports of portfolio performance, gut checks, lower class wines, etc.

The emotions associated with "losses" are so strong that they are more likely to be expressed, while the satisfaction occurring on days that produce the stock gains prerequisite to significant dips is able to be enjoyed silently.

While this all may be of limited importance, it might lead some to realize that market drops are no more significant than similar gains. While days of great appreciation don't keep us up nights dancing in our beds, down days like today shouldn't necessarily keep us laying awake all night either.

In any event, Buffett has often admitted using the fear of others to his advantage. But since he's not buying any of our stocks, I guess he won't be profiting on the emotions of G&Kers.

Marc

PS: Looks like you captured the essence of my post in far fewer words: "This weekend it was up almost 25% year-to-date. Now it's "only" up 15%. And we're only two-and-a-half months into the year for goodness sake!"
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