VANITY

Hello and welcome to my blog.

The following long excerpt is from 'The Psychology of Stock Market Timing' by Peter Wyckoff. It was published in 1963 and in many ways seems rather quaint. I also think this section of the book is an updated and revised excerpt from an even earlier book, "Why You Win, or Loss" by Fred C. Kelly.

"Probably the greatest single enemy to stock market success is vanity---one's own personal vanity. It is vanity that leads us to take small profits, but large losses. Even a fraction of a point net profit is all right, because small as it is, you have nevertheless beaten the market and that is a sop to vanity. But a fractional loss hurts your pride and, instead of accepting the loss after a stock begins to act poorly, you decide to wait for a rally to bail you out.

To take a loss is to confess that your original judgment was wrong; and that is not nice to admit. You hate to have your friends know you were a victim. Worse, you shrink from having yourself know it.

...number of men sitting around, calm and collected. Most of them probably have tiresome losses to which they have long become accustomed. They are still hoping to appease vanity by getting out even and are prepared to wait...if you see a nervous fidgety man, evidently not quite sure what to do, he probably is trying to make up his mind to sell and thus clinch a small profit before his vanity is in jeopardy.

Because of vanity, men hate to be compelled to do anything."

Beware of your vanity, pride and ego.

Greed and Hope are also examined and the following is the chapter summary.

"When a man is most confident that a stock is going to advance, what he means is: 'Oh, if it only would.'

People are so optimistic by nature that they are not esily scared.

The 'will to believe.' Cold facts are seldom as sensational as unchecked imagination.

We think to be true whatever we hope is true."

Thank you for your time.