Tim Harford - don’t buy high, sell low

[Steveam]

https://timharford.com/2024/05/the-less ... rade-less/

I don’t think this will be news to most on here.

Best wishes, Steve

[GeoffF100]

I think the most cautionary paragraph is:

"One possible explanation for this behaviour is that investors are deeply influenced by what they’ve seen the stock market doing across their lives so far. The economists Ulrike Malmendier and Stefan Nagel have found that the lower the returns investors have personally witnessed, the less they are likely to put in the stock market. This means that bear markets scare investors away from their biggest buying opportunities."

I think that sums it up well. people overweight their lifetime experience in their decision making. That works well for most things, but can work out badly when investing. We have lived through good times for equities,. We do not know what comes next, but the high valuations give us a clue.

[UncleEbenezer]

Is Harford bidding to put on some trendy new production of the Ring? Hmm, no, that would've been very 1980s.

But surely Loki's consequential tricks weren't against the little people (and the trolls successfully tricked Loki). It was big stunts like the death of Baldur. Or most consequentially of all, when he tricked Odin himself into taking on a debt he could never repay.

[MuddyBoots]

The frequent traders are a bit like a herd of sheep; they like to follow the crowd and pile in when it's going up and sell when we see the others doing so. It depends where you are in the herd: it pays better to be at the front if you're a frequent trader - herd animals are prey animals after all .