Its the Friday before a long weekend here (its actually called Summer Bank Holiday), so here's great post at Weakonomics (via Ritholtz) about average investor rationale. My favorite:
Oh sure, she knows she’s big, but she’s refusing to admit how big she is. Just like the investor knows they’ve lost money, but they won’t sell because they don’t want to admit it to themselves. In her world, she isn’t really fat until she gives up and starts wearing the one-piece. She hasn’t lost money until she sells the stock.
By wearing the bikini, she’s sending a message to herself that she could still slim down, or that she’s not as big as she is. Exhibit 1B on the other hand knows she’s big, and just wants to have fun at the beach. She knows she’s big, but doesn’t want to distract herself or others by jumping into the back-cleavage olympics. She’s just as likely, if not more likely to actually make a turn around. She’s the one who sold her stock at a loss and moved on with her life. It’s the rational decision, and the best one for her bottom line (and perhaps her waistline.
Enjoy. This also reminded me of this bumper sticker:
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