I love reading about and learning about the stock market.
Not just because it’s a way to make money (and also a way to lose everything).
But because it’s based on human psychology.
Sure, there are all kinds of technical and fundamental indicators.
GDP growth or not, job growth or not.
Technical indicators, MACD, slow and fast moving averages, etc.
Some of the indicators like the VIX (which measures volatility) is EXTREMELY complicated.
You need a couple semesters of calculus just to understand how the VIX is calculated.
But hidden inside all those indicators and equations is the human brain.
All of it is so we talking monkeys can have an idea of what to do.
And despite HOW we make our choices (buy, sell or hold) they are HUMAN choices.
Subjective choices.
I suppose of Spock decided to trade stocks for a living, he’d do pretty well.
But we humans cannot escape our emotions.
Experienced stock traders say that even after the BEST trade, they STILL have regrets.
I should have held on a little longer.
I should have bought more in the beginning.
I could have made MORE money.
Greed and fear are ALWAYS present.
Traders can’t get rid of them any more than we can get rid of hunger.
Jesse Livermore, a famous trader from back in the 1920’s, wrote a book about the stock market.
One that is JUST as valid today as back then, nearly 100 years ago.
Why?
Because human emotions haven’t changed.
Even back then, Livermore remarked that the psychology behind the stock market is as “old as the hills.”
Humans want the same things today as we did 1000 years ago.
More money, less work, better relationships, better sex, more love, more affection, less frustration.
Despite the MASSIVE complexity of daily live, the human condition is the same as it ever was.
Which means if you understand the human condition, it doesn’t matter what else you know or don’t know.
Because you’ll have a huge advantage.
Learn More:
One comment