The forces. Not the headlines.
Analysis and commentary on markets, companies, and the forces that move them.
Position Size and Emotional Intensity
Doubling a position does not double the emotional response. The response stays nearly flat below a certain threshold and rises sharply above it, and that threshold varies by person and is seldom measured.
Why Information Consumption Spikes During Declines
Readership of market information peaks during declines. The quality of market information reaches its low point across the same stretch. The coincidence in timing is no accident.
How Echo Chambers Harden Mistaken Views
Hearing the same argument repeatedly registers in the mind as independent evidence accumulating. Where the repetitions originate from a single source, the confidence that accumulates has nothing underneath it.
The Two Forms of Fear of Missing Out
Fear of missing out is usually described as an urge to buy into something. Its more common form appears in people who already hold the asset, and it is far better disguised.
Why Investors Remember the Calls They Got Right
Memory preserves forecasts selectively. Correct forecasts come with clear cues for recall. Incorrect ones lack any occasion that would bring them back to mind.
Paper Losses and Realised Losses
The same sum of money carries a different psychological weight on paper from the weight it carries once realised. The difference has no economic basis and influences decisions with great consistency.