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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: matherandlowell who wrote (91469)	5/7/2010 1:12:59 PM
From: Jacob Snyder	13 Recommendations Read Replies (1) \| Respond to of 196531

<there is no way to know prospectively> If the future is unknowable, there is no point in trying to pick stocks or buy-prices. Everyone is trying to predict the future, and profit by it, except nihilists. The best predictor of the future, is long-term consistent historical patterns. It's simple: identify those patterns, extrapolate, and act. Consistently, I find most of my fellow investors: 1. think vaguely, without using numbers 2. over-emphasize the importance of short-term patterns, relative to long-term patterns 3. fall in love with a stock or a sector 4. are lazy, relying on other people's facts and conclusions, without checking the best available data or analyzing it themselves. 5. do Herd Behavior 6. act like manic-depressives who need their meds adjusted 7. exaggerate their ability to predict the future 8. ignore both tails of the bell-shaped curve, especially the down-side (this is just a restatement of #7). I don't claim to be immune to these faults myself, and I'm skeptical of anyone who claims they are. I can explain 99.7% of investor's behavior, by looking at the behavior patterns shared by all the social mammals: wolves, whales, and especially chimpanzees. Our neurons are wired the same way, and bathed with the same flux of hormones, so we can't help acting the same. Why do investors sell, just because everyone else is? When a feeding chimp on the ground looks up, and notices none of the other chimps are feeding or on the ground, and sees everyone else in the tribe is climbing as fast as they can, then he suddenly gets very anxious. He hasn't yet seen the jaguar, but his instinct is to start climbing or running, without thinking too much about why. The anxiety builds rapidly until he follows the herd. Once the whole herd is together at the top of the tree, they will reduce their anxiety, with mutual calming activities (chimps pick parasites out of each other's fur, bonobos have sex, you and I recommend each other's posts).