Investor Psychology

Uncovering Value: Price Discovery And Irrational Investing Behavior

This post was written with Chris Kerlow and Craig Basinger. The essence of money management can be encapsulated in searching for investments that are trading below their intrinsic value. In theory, it works like this:  Buying these companies low, and as the market comes around to realize their intrinsic value,…

Investing Trends: Why It Pays To Stay In The Now

A Simple And Powerful Concept Eckhart Tolle’s New York Times Best Seller The Power Of Now has sold over 3 million copies worldwide and has been translated into over 30 languages. The basic premise of the book is captured in the excerpt below: “Nothing has happened in the past; it…

The Anatomy Of A Successful Trader: 12 Key Traits

For those serious about trading for a living, the following is a list of characteristics found in every highly successful trader. Realize that 1% of the people who play this game take 99% of the profits. That means 99% of people who call themselves “traders” are forking over all their…

Mind Games: 3 Behavioral Traits Investors Should Be Mindful Of

In “Bubbles and Elevators”, we discussed how human beings do seemingly ridiculous things to fulfill their instinctive need to mimic what others are doing, right or wrong, logical or illogical. The greatest investors, those that make money when markets are rising and avoid the pain when bear markets occur, are…

10 Trading Rules For New & Aspiring Traders

Whether an amateur or professional, trading is a difficult endeavor. The markets can be unforgiving… and, as much as it pains traders, are always right. It takes a strict trading process and discipline, amongst others, to succeed in this business. Below are 10 golden trading rules that can help new…

Insights Into Investing Through Financial Bubbles and Elevators

Financial Bubbles and Elevators Volumes have been written on behavioral finance and the seemingly “irrational” decisions investors tend to make to avoid straying from the herd. This article examines a current example coined “FOMO” (fear of missing out), in today’s texting parlance. Through a better understanding of the psychological dynamics of…

Trading Can Be A Bloodsport

I’ve spent the past week recharging my batteries on a family vacation in Rocky Mountain National Park (Colorado). I’ve snuck in a few trades and worked on the website, but other than that it’s been great to just spend time with the family and enjoy the beautiful scenery. I was…

Conviction Is A Good Thing… Just Tune Out The “Big Calls”

A large segment of Wall Street – analysts, news pundits, etc. – is paid to make calls for individual stocks and the broader stock market indices as a whole without personally committing capital towards these predictions. Do you see any conflict there? If your prediction is wrong, the majority of…

Trading Streaks: Seeing Through The Ups And Downs

If you are a trader, it is almost a certainty that you have had to deal with the ups and downs of trading streaks… and the effect they have on your psychology. Today, I am going to dig into some detail about this topic of trading streaks in data. I…