# Biased people against stocks



## blaz0430 (28 July 2014)

Why are people so biased when it comes to trading shares and commodities etc. Many people give the stock market a bad name because of the money they lost but seriously, it's not that hard to set a stop loss right?


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## Value Collector (28 July 2014)

blaz0430 said:


> Why are people so biased when it comes to trading shares and commodities etc. Many people give the stock market a bad name because of the money they lost but seriously, it's not that hard to set a stop loss right?




Are you talking about the stock market in general, or just trading?

If you are talking about trading, then it is probably the perceived risk / gamble of it. Most people have no idea what drives share prices. So it's no difference to the spin of the roulette wheel in their eyes, where they are betting on red or black, added to that the trading costs and fee's basically act like the Green zero on the roulette wheel, putting the odds at less than 50/50 in favour of the house.

I am not saying that there are not very skilled traders, that can effectively put the odds in their favour, however the average punter can't.


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## darkhorse70 (28 July 2014)

Because it sounds like a get rich quick scheme. In reality its the complete opposite. It requires alot if hard work/understanding/skill and a touch of good luck. Even a stop loss cant help you someimes when the market opens 15% lower haha


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## Knobby22 (28 July 2014)

I know a family who is fatherless because he blew all the family money on FX trading.
He committed suicide. That's how the bad name occurs.


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## Value Collector (28 July 2014)

Knobby22 said:


> I know a family who is fatherless because he blew all the family money on FX trading.
> He committed suicide. That's how the bad name occurs.




That's terrible.

Unfortunately trading is seen as easy money by new entrants, You can see this when a lot of new people come to threads here keen to chase the "high  returns" they can get from trading, They often seem disgusted at the idea of having to tie up their money for 3 years in an investment operation earning 10 - 15%pa. 

Unfortunately, this  leads a lot of people into the gambling mindset, In my opinion the vast majority of people would get better results through an investment approach.


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## tech/a (28 July 2014)

> That's terrible.




I'm afraid I'm not so sympathetic.

How selfish to leave behind your mess for your family to be affected then to clean up.
What a waste of the gift of life!
Learning nothing.


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## Julia (28 July 2014)

A lot of the negative bias seems to be based on misapprehension.  As already noted, that it's all about gambling, just taking a thoughtless punt on some speccie that's gunna be the next big thing.  And because that does happen, it gets conflated into that being the essential nature of the stock market.

If you instead were to say to someone "do you think Woolworths is a good business?  do you think it's profitable?", and inevitably the reply would be "yes, of course", and then you'd ask them "well, don't you think it might be worth having a small share of the profits of that business", a look of dawning realisation emerges.

So I'd suggest the negativity is based largely on ignorance.  That in turn may well have caused some of the true disasters we've seen, and so it becomes a self-reinforcing philosophy.

And then there's greed, which is a whole other subject.


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## Knobby22 (28 July 2014)

tech/a said:


> I'm afraid I'm not so sympathetic.
> 
> How selfish to leave behind your mess for your family to be affected then to clean up.
> What a waste of the gift of life!
> Learning nothing.




That's my attitude too tech/a. He wrote a letter saying he had failed the family and didn't derserve them. How selfish. Now the poor boy hasn't a Dad and the wife has to start again on her own. I have always though of suicide as gutless.


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## McLovin (28 July 2014)

Explained well here...

http://thingsboganslike.com/2011/08/19/242-playing-the-market/


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## Wysiwyg (28 July 2014)

Value Collector said:


> Unfortunately trading is seen as easy money by new entrants, You can see this when a lot of new people come to threads here keen to chase the "high  returns" they can get from trading,



Yes the right place at the right time can multiply a bank roll quickly. I see stocks, fx, indices move to allow that to happen so believe I can do it again and again.
Done it and gave it all back again. How silly of me.:frown:


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## Smurf1976 (28 July 2014)

Share trading and indeed any form of investment requires at least some knowledge in order to be profitable over the long term. Even just putting your money in a term deposit requires a small amount of effort to get it right - comparing deposits and banks etc and then you have to actually transfer the money.

Same with anything, some will make the effort and some choose not to. That's not just true with investing, it's the same with anything in life. Personal fitness doesn't come without an understanding of what you need to do, and then putting in the effort to actually do it. Same with careers - anything from a plumber to an accountant requires that you make some effort to get there. And of course there are good plumbers and there are dud plumbers around too.

The "can't be bothered" factor exists in all fields, the only real difference with trading being that many do see it as a "get rich quick" opportunity and make huge mistakes with a gambling mindset. That the barrier to entry is minimal is a major contributing factor I think. Anyone can open a brokerage account and start trading whereas becoming a lawyer, electrician or something like that has much higher barriers to entry since a formal qualification is required in order to legally work in these fields.

Those seeking to "get rich quick" will naturally tend toward things with low barriers to entry and the promise of huge returns. Short of stumbling across a gold nugget somewhere in the bush, trading shares pretty much tops the list in terms of being (1) easily accessible and (2) practically everyone knows that the share market exists and that shares can be bought and sold by individuals. It's an absolute magnet for such people, and they'll inevitably make huge blunders and give the whole thing a bad name.


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## Julia (28 July 2014)

McLovin said:


> Explained well here...
> 
> http://thingsboganslike.com/2011/08/19/242-playing-the-market/



That's so funny.  Probably not limited to bogans either.


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## DeepState (28 July 2014)

Few things:

1. Prospect Theory.  Wins of a $1000 don't feel as good as how much the mirror (losing $1000) feel bad.  But, when you lose enough, the pain just gets dull and people will gamble to try to make up for losses because they are experiencing 'get-even-itis'.  There are certain strategies discussed in this forum that are essentially doing this.

2. Lottery Effect.  When it comes to the notion of really high pay-offs with low probability, we don't think in terms of expectation.  We just think in terms of the possibility and pay-up.  Why do we buy lottery tickets when the pay-offs are so poor in terms of expectation?  It has been found that when things are down, people take more lottery style positions trying to get themselves out of their life problems.

3. Illusion of control. A false belief that you actually control the outcome.  In casinos, people roll gently when they want a low number in Craps.  They will roll vigorously when they want a high number.  In this forum, there is material discussion on very high returns which can be achieved via a 12 step program.  Do that and riches are yours.

4. Bright shining lights attract our attention and hold it.  Take a look at a poker machine...now take a look at the trading portal for some FX trading front end.  Both flash a lot making you think something meaningful is going on, all the while exuding 'look at me, look at me!'  When coupled with periodic dopamine hits, especially when your brain is wired to find that particularly strong, and you get addiction of a very serious kind.  It can be as addictive as cocaine.  It is the same chemical pathway.

FFX (and certain other types of) trading plays to all of the above.  Most entrants are terminal investors and the platforms and account managers are just there to keep them happy until the accounts are drained whilst attracting the next cohort.

The suicide is tragic on all fronts.  But I suggest finding out more about what happens in brain chemistry when subject to above and then hitting the floor before regarding it as a cheap out.  Other things are often going on, few of them rational.  This case is not isolated.  

Speculation and trading can have a bad name because it has the character of casinos and plays directly to known and verifiable human bias.  However, this game proceeds without the protection of anti-harm provisions. Sometimes people lose more than money.


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## Faramir (28 July 2014)

My parents have a dislike of the stock market. Actually my Dad has a complete hatred of the stock market. He has never brought shares in his life but he thinks anyone else that does it will destroy three generations of hard work and savings. He thinks people who put money into the stock will eventually steal from their love ones and friends so that they can put more money into the stock market. He has a severe hatred towards gamblers but he thinks the stock market was worst than poker machines. He worked in a soccer club and every night he watch people pour heaps into poker machines or make bets. Yet somehow the stock market is MUCH MORE WORST! This is what I grew up with. It poisoned my attitude towards the stock market. I can't understand why he has this intense hatred towards the stock market. Don't tell me that I am sounding extreme. Even I can't believe what I am writing. Dad worked hard all of his life and he hates money being wasted or risked.

My main regret is not to educate myself when I was younger and make some wise investments. I would have shown Dad (while he was alive) that I could be successful with the stock market. In his final years, I was too busy, distracted with lots of hospital and doctors trips that I missed great opportunities like GFC. Not much I can do, I still owe him a lot, especially for the sacrifices he made. Mum would of have heaps more if Dad had a different attitude. At least he saved very hard and left mum something. He didn't understand that it was possible to beat inflation.

Most people just have ignorance. They didn't have to overcome the attitudes of those who raised them stating that the stock market is full of evil people.


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## Faramir (28 July 2014)

DeepState said:


> The suicide is tragic on all fronts.  But I suggest finding out more about what happens in brain chemistry when subject to above and then hitting the floor before regarding it as a cheap out.  Other things are often going on, few of them rational.  This case is not isolated.
> 
> Speculation and trading can have a bad name because it has the character of casinos and plays directly to known and verifiable human bias.  However, this game proceeds without the protection of anti-harm provisions. Sometimes people lose more than money.




When people suffer depression, sometimes they commit suicide because they think the 'selfish' thing to do is to stay alive and make life worst for their families. They think their families would be better off if the individual wipe himself herself from existence. Sounds illogical but that is how they sometimes think. They actually think everyone else around them would be better off if they stopped existing. (That's not all suicides but some did say those were their thoughts when they were thinking about.) Suicide is such a complex topic that I should not discuss it here. Beyond Blue is probably a better place to visit.

As for the one who left his family behind, maybe if he never started trading, other 'cause' or trigger would have caused it??? Who knows??

I find the stock market complex. I try to put some effort in. Most people due to tine constraints, etc. That is why they are biased against it (as stated above.)


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## Value Collector (28 July 2014)

Faramir said:


> I find the stock market complex. I try to put some effort in. Most people due to tine constraints, etc. That is why they are biased against it (as stated above.)




A lot of people over complicate the market, and over think it. The simplest way is just to think of it as a place to buy little pieces of companies. Focus on finding good companies you understand and then buy them at prices which seem fair based on the earnings they produce. If you focus on that it's pretty simple.

If time is a problem, flick the autopilot switch and just buy all the companies via an index.


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## Klogg (29 July 2014)

DeepState said:


> Few things:
> 
> 1. Prospect Theory.  Wins of a $1000 don't feel as good as how much the mirror (losing $1000) feel bad.  But, when you lose enough, the pain just gets dull and people will gamble to try to make up for losses because they are experiencing 'get-even-itis'.  There are certain strategies discussed in this forum that are essentially doing this.
> 
> 2. Lottery Effect.  When it comes to the notion of really high pay-offs with low probability, we don't think in terms of expectation.  We just think in terms of the possibility and pay-up.  Why do we buy lottery tickets when the pay-offs are so poor in terms of expectation?  It has been found that when things are down, people take more lottery style positions trying to get themselves out of their life problems.




Kahneman FTW 

Might also add _Loss Aversion _and the _Endowment Effect_ in there, as they're definitely relevant.


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## DeepState (29 July 2014)

Klogg said:


> Kahneman FTW
> 
> Might also add _Loss Aversion _and the _Endowment Effect_ in there, as they're definitely relevant.




Pity Tversky didn't live long enough to collect his Nobel too.

Not so much loss aversion (don't like taking a loss) as disposition effect (will not realise a loss [or stop trading despite incurring losses]...because it's not real until you sell it [or stop trading entirely]).

As to endowment effect, what colour is your mug?  How much?


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## Julia (29 July 2014)

Value Collector said:


> A lot of people over complicate the market, and over think it.



+1.


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## Leiothrix (1 August 2014)

Knobby22 said:


> How selfish




So what you're saying is that people shouldn't have bodily autonomy, and must live in case it upsets you or someone else?  That's pretty selfish.

In either case, if mental illness is involved you can't ascribe their actions to a rational thought process.

Back on topic -- people are just scared of what they don't understand.  Generally they won't seek better understanding, and often even after correcting their understanding their fears will remain.


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## tech/a (1 August 2014)

Leiothrix said:


> So what you're saying is that people shouldn't have bodily autonomy, and must live in case it upsets you or someone else?  That's pretty selfish.
> 
> In either case, if mental illness is involved you can't ascribe their actions to a rational thought process.
> 
> Back on topic -- people are just scared of what they don't understand.  Generally they won't seek better understanding, and often even after correcting their understanding their fears will remain.




Understanding and Implementation may well be streets apart!
Oh and I doubt the case Knobby described was mental illness.
Lost the families life savings and couldn't face the music.
He knew WHY-----didn't want to face the implementation.


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## Knobby22 (1 August 2014)

Well put. he had no history of mental illness.

He would have been more help to the family by admitting he stuffed up, restarting and doing his best as a husband and father to his 6 year old boy... that would have been the gutsy route. 

Instead he caused additional psychological damage to his family and left them having to deal with his burial.  ... just because he lost some pride.  As I said selfish.


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## tech/a (1 August 2014)

Knobby22 said:


> Well put. he had no history of mental illness.
> 
> He would have been more help to the family by admitting he stuffed up, restarting and doing his best as a husband and father to his 6 year old boy... that would have been the gutsy route.
> 
> Instead he caused additional psychological damage to his family and left them having to deal with his burial.  ... just because he lost some pride.  As I said selfish.




Strange as it may seem ---I actually welcome challenging times.
I've learnt more overcoming adversity than bathing in the sun of success.


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## CanOz (1 August 2014)

We're all brought up differently with different beliefs and values that evolve over time. We can't imagine what that individual felt at the time, how much help they did or didn't receive...To comment on it really doesn't serve anyone any good but ourselves....


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## tech/a (1 August 2014)

CanOz said:


> We're all brought up differently with different beliefs and values that evolve over time. We can't imagine what that individual felt at the time, how much help they did or didn't receive...To comment on it really doesn't serve anyone any good but ourselves....




Mine is a personal view. Self serving??? Maybe.



> To comment on it really doesn't serve anyone any good but ourselves




Not so sure about that.
My and others comments might make someone consider others-------
He--you--I--wont be the first or the last to have tremendous hardships thrown at us in life.
Half the problem in my view (Again personal) is that not
enough people speak their mind.


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## pavilion103 (1 August 2014)

I agree that the action to do such a thing elevates the needs of the individual above that of his family. I think it is terrible. 

Having said that we ultimately don't know what was going on in his mind. Maybe things that we can't comprehend or a level of delusion and hopelessness that ultimately completely impaired judgement. 

I have someone very close to me who suffers from depression. Total and utter hopelessness. When in a "normal" state of mind he is a compeltely different person to when the depression completely overtakes and overwhelms him. I have personally seen a transformation that scares me. It can't be taken lightly. 

I used to be of the view of "suck it up" when people took and easy option. Now I tend to think that most times people will take  a "cop out", but also sometimes it can be beyond a level that can be understanded by most.


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## Wysiwyg (1 August 2014)

tech/a said:


> Strange as it may seem ---I actually welcome challenging times.
> I've learnt more overcoming adversity than bathing in the sun of success.



So true. The school of hard knocks have many been to.


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## tech/a (1 August 2014)

Back to the Stock Bias.

I think we all agree that lack of understanding prior to entering the market 
stops many from doing so.
Then lack of understanding more in respect of trading itself and the basics of risk mitigation
once they take the "Plunge".

Yet the same could be said for people in the housing market.

I think however those who fail dismally are those who basically "Gamble" in the stock market.

But If I use this comparative analogy with say horse racing.

(1) I can place a bet worth $100000s with a click of the mouse.
(2) If I think my race is a year long and I don't like where I'm placed in a month
I can get out of the bet before the end of it---with a profit or loss
(3) If the race is going well I can add to my bet before the end of it!
(4) If I see that the race is now looking better for me I can re enter it!
(5) I can take some of my profit or loss before the end of the race.
(6) At the end of the race its very UNLIKELY I'll lose my total initial stake!
(7) I can make money if my horse runs in the opposite direction. (Not available on all horses)
(8) In some cases my horse will pay me during the race just because I'm on it!
(9) I can vote to change Jockeys---during the race!!

How'd you like to do that on the Melbourne Cup!

Now to me that's a pretty good bet!


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## CanOz (1 August 2014)

pavilion103 said:


> I have someone very close to me who suffers from depression. Total and utter hopelessness. When in a "normal" state of mind he is a completely different person to when the depression completely overtakes and overwhelms him. I have personally seen a transformation that scares me. It can't be taken lightly.
> 
> I used to be of the view of "suck it up" when people took and easy option. Now I tend to think that most times people will take  a "cop out", but also sometimes it can be beyond a level that can be understood by most.





...totally agree


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## Smurf1976 (1 August 2014)

Mental illness etc - having seen someone suffer a complete breakdown, I take the whole issue far more seriously than I once did. Problems affecting the mind are every bit as real an illness as a broken leg, cancer or heart attack. Practically everyone is a potential victim under the right circumstances - you can reduce your chances of suffering a mental illness just as you can reduce your chances of getting cancer but there are no certainties. 

Lack of understanding and fear - it's the same with everything, not just the market. I hear it all the time in the context of work. Solar power doesn't work during winter in Tassie (fact = yes it does if designed properly), you can't heat a house with an air-conditioner when it's snowing (fact = yes you can with the right system) and hydro power isn't reliable either (fact = has a better reliability record than coal or nuclear). 

It's the same with anything. Most people have a very limited understanding of any given subject, that being an inevitable consequence of living in an increasingly complex world. 200 years ago it was plausible that one individual could understand most machines, manufacturing processes, agriculture etc in use at the time since there wasn't a huge amount to grasp. 

But things have changed, and done so in a relatively short space of time. 35 years ago cars were still relatively straightforward and most people could, if they wanted to, understand how all the parts worked and make repairs as needed. But today, very few people could really explain properly how it all works and feel confident to make repairs. In the space of a single generation, cars have gone from "not that difficult" to "completely beyond the abilities of most" to fully understand.

I could post a million other examples probably. We're living in a world where most people understand very little of what goes on around them and that trend continues to increase. People are naturally frightened of things they don't understand, especially when their limited knowledge tells them that some sort of danger is involved. Hence people won't DIY maintenance on their 5 year old car and they won't go near the stock market. They're frightened of costing themselves big $ messing about with something they don't really understand.


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## qldfrog (2 August 2014)

And I would like to say that I find it hard to believe that anyone actually "understand" the stock market;
I would say I managed to learn most of the mecanisms involved, I know the theorical knowledge between bond and market, gold, inflation, options, etc
yet as everyone, I can not judge mass reaction (the psychological aspect of the market) nor do I know in advance what the RBA next move will be;
Posteriory, I can give an explanation of why this or that happens, you find pages of "business news" doing that but the truth is:
in the stock market, at least on the short or medium term, the same inputs may give you two very different outcomes.
If anyone was "understanding" the stock market fully, he/she would be billionaire very quickly
So you 9and I) manage risk, value, or even TA to put more odds on your side, limit risk leverage gain etc but the unknown remains.
While fully involved, I do understand the reluctance of most to jump in;
It is not a casino(you and I know it: we are here and "aware"), but for most, this is what it will still look like.


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## Value Collector (2 August 2014)

qldfrog said:


> And I would like to say that I find it hard to believe that anyone actually "understand" the stock market;
> I would say I managed to learn most of the mecanisms involved, I know the theorical knowledge between bond and market, gold, inflation, options, etc
> yet as everyone, I can not judge mass reaction (the psychological aspect of the market) nor do I know in advance what the RBA next move will be;
> Posteriory, I can give an explanation of why this or that happens, you find pages of "business news" doing that but the truth is:
> ...




I don't think that when people say they "Understand" the market, that they are claiming to know everything that will happen.

eg, Some one can say they understand the rugby league, that doesn't mean they are claiming to know the outcome of every game before it happens.

________

The fact that a lot of people see it as a casino is unfortunate,


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## tech/a (2 August 2014)

Value Collector said:


> I don't think that when people say they "Understand" the market, that they are claiming to know everything that will happen.
> 
> eg, Some one can say they understand the rugby league, that doesn't mean they are claiming to know the outcome of every game before it happens.
> 
> ...




To add

I personally don't think you have to know everything.
A basic understanding of micro and macro economics helps.
But I trade without knowing anything about a stock other than it's code.
(when systems trading) even discretionary trading.


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## burglar (2 August 2014)

Value Collector said:


> ... The fact that a lot of people see it as a casino is unfortunate,





computers
internet
dot.com bubble

tech wreck
commodity boom
global financial crisis

*The market is more like a casino than ever it was.*


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## qldfrog (2 August 2014)

I disagree on the casino analogy:
I bet but I manage my risks I can not go to the roulette and p;ay $200 on red  yet take an insurance to cover part of my losses if I loose; options allows that on the share market
But I agree that more than ever before (or at least more than ever since I was a teenager, markets have a huge volatility


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## barney (2 August 2014)

Smurf1976 said:


> Problems affecting the mind are every bit as real an illness as a broken leg, cancer or heart attack. Practically everyone is a potential victim under the right circumstances
> 
> Most people have a very limited understanding of any given subject, that being an inevitable consequence of living in an increasingly complex world.
> 
> We're living in a world where most people understand very little of what goes on around them and that trend continues to increase.





Good post Smurph ..... The sooner that we (humans) come to terms with our own mortality and insignificance in the overall scheme of the Universe, the more likely we will eliminate a lot of the worlds issues.  Do I think that is likely to happen??  Nah, man is pretty much doomed in the long term

Suicide is tragic, especially when "caused" by a mistaken belief that losing ones material wealth makes you a failure!  .... The failure is actually in the belief that material wealth even mattered in the first place

Peer pressure is the cause of many suicides  ... rather than have the gal to judge some poor soul for feeling the ultimate pressure to terminate their existence, we should perhaps feel guilt that our own misguided sense of self worth may have actually contributed to their decision!! (and I include myself in that summation)


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## DeepState (2 August 2014)

qldfrog said:


> And I would like to say that I find it hard to believe that anyone actually "understand" the stock market;




I don't understand how my computer works, or what goes on in the cloud.  But I can use it, and it works.  My knowledge about the computer and the cloud is thus adequate for my purposes.

I have no idea how to appropriately price a CDO-squared tranche with embedded copula functions.  I can trade them, easy.  I understand them enough to describe them and to even write out the formulation (after some-one else wrote it down for me first). But my knowledge is inadequate for the purpose of intelligently taking risk to make profit.  Perhaps my knowledge is at the limit of what is humanly achievable.

We do not need to fully understand something to use it.  But if our understanding is insufficient, more bad stuff tends to happen than would otherwise be the case.  That gap differs according to the characteristics of the thing you are trying to understand.  The problems we are trying to understand are nowhere near identical in nature and the consequences of error are massively different. Having a population average ability to cut a turkey is rather different to having a population average ability for brain surgery.

In the case of the markets, I too doubt that anyone could possibly understand it sufficiently, achieving the kind of deterministic knowledge purported by Qldfrog's fellow countryman Pierre-Simon Laplace, to eliminate the adverse outcomes arising from the Rumsfeld-ian known unknowns or unknown unknowns...because we don't know or understand it enough to properly manage it. But, for some, their knowledge is good enough for most circumstances and they have a working knowledge about the consequences of the gap in the understanding they have and what might be the level required to eliminate the risk.  For others....well, maybe they don't understand enough that they don't understand enough. For them, a casino might actually be safer.


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## DeepState (2 August 2014)

qldfrog said:


> I disagree on the casino analogy:
> I bet but I manage my risks I can not go to the roulette and p;ay $200 on red  yet take an insurance to cover part of my losses if I loose; options allows that on the share market
> But I agree that more than ever before (or at least more than ever since I was a teenager, markets have a huge volatility




  Actually, the roulette example is a binary option.  By playing roulette, taking enough spins, you can generate whatever option payoff you want with the bets available to you at the casino.  This approach is actually how options are priced in practice....Black-Scholes-Merton model.

Markets are worse than a casino.  In the casino, you know the odds and you know the rules of the game and these don't change. There are always cheap buffets around too. Seeing the markets as a casino is putting the casino is a good light.  The increasing complexity of the financial markets and economies is making this gap more wide with time.


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## sydboy007 (2 August 2014)

I think the goal you have is the important thing to understand.

Then you can start to look at the best way to achieve it, and the varying levels of risk you will need to take.  Generally the longer the time frame you have, the lower the level of risk you would need to take.

The issue is numerous studies show a lot of people buy high and sell low.  If you are likely to do that, then a lower risk investment may be a better long term way to build wealth.  The below graph is admittedly for the USA but I doubt there'd be much difference in Australia.

You also have a need to think about sequencing risk - Ken Henry did a good talk about this back in 2012 at the the 11th Australian Securitisation Forum Conference (I've attached it for anyone interested in the topic).  This becomes a greater issue the shorter your investment horizon is.

The GFC also showed that it was good to have a truly balanced portfolio (as opposed to the misnamed balanced super funds).

If you're in, or close to, retirement then inflation linked bonds may be a far safer way to generate the required income to live off for an extended period of time, while someone with 30 years or more to invest can afford to take on more risk in shares.

I think the sensible way forward to is to try and take the least risky path to achieve your goals.


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## Julia (2 August 2014)

barney said:


> Nah, man is pretty much doomed in the long term



What a pessimistic outlook.  Every day we have examples of ordinary people doing good things.  Concerned individuals who look out for others.  Scientists who make life saving discoveries.  I believe most people are fundamentally well motivated.  Beliefs such as you have expressed above, if held by enough of the population, have the capacity to be self-fulfilling.  If you constantly, e.g. tell indigenous people that they will never make anything of themselves, that their destiny is to fail, then that is what will happen.

In contrast, if we instil in ourselves and others the belief that we are all capable of achieving more than we thought possible, that we have resources we've not yet recognised, then that also has the same capacity to be self-fulfilling.



> Suicide is tragic,



Not necessarily.  Sometimes it's the only answer, in the absence of good end of life legislation, and is a completely rational choice, allowing the individual an escape from pain that they find intolerable, whether physical or psychological.



> especially when "caused" by a mistaken belief that losing ones material wealth makes you a failure!  .... The failure is actually in the belief that material wealth even mattered in the first place



This is to assume the 'cause' is as simplistic as stated originally.   Almost certainly all sorts of other stuff will have been going on in that person's life.  The loss of money of itself, in an otherwise well adjusted individual, imo would be unlikely to cause suicide.



> Peer pressure is the cause of many suicides  ... rather than have the gal to judge some poor soul for feeling the ultimate pressure to terminate their existence, we should perhaps feel guilt that our own misguided sense of self worth may have actually contributed to their decision!! (and I include myself in that summation)



If attributing blame to yourself serves some purpose for you, then I guess you know best about that.
I don't believe that any individual's sense of self worth is determined by anyone else, and I absolutely don't believe the ordinary citizen has a personal responsibility for the end of life decisions of any other person.
Unless, I suppose, they are a pivotal influence in that person's life.  Even then, suicide is absolutely an individual and totally personal choice.


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## Smurf1976 (2 August 2014)

DeepState said:


> We do not need to fully understand something to use it.  But if our understanding is insufficient, more bad stuff tends to happen than would otherwise be the case.



+1

A key difference with investing is the presumption of DIY when it comes to the stock market. If you are buying shares directly, or are investing in an "all stocks" managed fund, then you have basically chosen to totally (direct) or partly (managed fund) DIY the decision making process as to what to invest in. And if things go wrong, well then you're on your own to deal with it. 

If the computer, car or electricity stops working then most people will call a professional, or at least a friend, to assist if they can't spot the problem themselves. But if your self selected share portfolio drops 20% next week, well then what do you do? Most wouldn't even think of paying someone for advice in that situation. Then emotion combined with lack of knowledge takes over.....

We'd have a lot more people electrocuted if they took the same approach to electricity as is taken with investing. Nobody in their right mind just pokes random wires into random terminals, does the screws up then turns the power on hoping for the best. But that's pretty much what many do when it comes to investing and that leads to fear amongst those who don't understand anything about it. They'd be terrified of electricity too if we took the same approach and every second house burnt down.


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## barney (4 August 2014)

Julia said:


> What a pessimistic outlook.  Every day we have examples of ordinary people doing good things.  Concerned individuals who look out for others.  Scientists who make life saving discoveries.  I believe most people are fundamentally well motivated.  Beliefs such as you have expressed above, if held by enough of the population, have the capacity to be self-fulfilling.  If you constantly, e.g. tell indigenous people that they will never make anything of themselves, that their destiny is to fail, then that is what will happen.
> 
> In contrast, if we instil in ourselves and others the belief that we are all capable of achieving more than we thought possible, that we have resources we've not yet recognised, then that also has the same capacity to be self-fulfilling.




Yes you are right of course Julia .... My post was not meant to pessimistic; more frustration .....  

My negativity (frustration) was channelled at anyone finding it necessary to make judgments on suicide victims without knowing anything about their state of mind or their life circumstances.  


Ridiculing a suicide victim for their lack of consideration to others when they were likely in an altered state of despair and depression is a bit like telling a blind person to watch where they are going in my opinion. 

This particular chap would have been suffering incredible despair. He may have also lost the respect/support of his Wife and Family,  which would have been totally devastating ...... very unpleasant all round.


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## burglar (4 August 2014)

barney said:


> ... when they were likely* in an altered state *of despair and depression is a bit like telling a blind person to watch where they are going ...




I agree. 

Depression rewires the brain.
It turns you into someone else.






(Q. How do you upset a blind person?
A. You move their furniture!)


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## craft (4 August 2014)

barney said:


> My negativity (frustration) was channelled at anyone finding it necessary to make judgments on suicide victims without knowing anything about their state of mind or their life circumstances.
> 
> 
> Ridiculing a suicide victim for their lack of consideration to others when they were likely in an altered state of despair and depression is a bit like telling a blind person to watch where they are going in my opinion.
> ...






Those that would ridicule a suicide victim without walking a mile in that persons shoe must have psychological/ self esteem issues of their own that they are desperately compensating for. I Pity for them too. 

...............................................

The brain is powerful enough to take action to kill its host, sometimes for unfathomable reasons, so acting on a bias against the share market would be a walk in the park – the basis of that bias could be minuscule; trivial even unrelated to the market but powerful enough to provide a lifetime of evasion. 

So forget looking for rational reasons why people might be averse to the market and look at how the brain works – might find other things to help your own trading in the process.


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## Julia (4 August 2014)

barney said:


> Yes you are right of course Julia .... My post was not meant to pessimistic; more frustration .....
> 
> My negativity (frustration) was channelled at anyone finding it necessary to make judgments on suicide victims without knowing anything about their state of mind or their life circumstances.
> 
> ...



Thanks for the clarification, barney.   Sorry if I sounded terse.   My frustration equals yours.

I can't think of anything much more demeaning to someone in such despair as to even be considering taking their own life than 
1.  being profferred some platitude like "cheer up, you've still got plenty to live for".  
2.  being accused of selfishness.

Having had two relatives who committed suicide, I know so well the torment and anguish they went through before finally finding the courage - out of desperation - to end their lives.

Probably we've said enough on this on this thread.


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## Craton (4 August 2014)

Faramir said:


> Actually my Dad has a complete hatred of the stock market.




Snap! My dad had this dislike too. He called himself conservative when it came to money. I learned over the years that he was risk averse. Bricks and mortar and cash ruled supreme in his mind.

He said the s/market was a lot of b/s and I never found out why he distrusted the s/market so much. Perhaps being born Italian in 1923, he would have remembered the tough Depression years and then the lead up to WWII (Musollini was one person he hated with a passion), maybe it was his ignorance of the machinations of the s/market here in Oz or he'd lost money, dunno but anytime I spoke to him about investing in a stock say like BHP, his venom on all subjects relating to stocks was palpable and literally a taboo subject that I could never discuss with him.

Mom? Nope, dad managed all finances in our household (typical head of the family stuff) and she was given X amount for bills and groceries and now he's gone, guess who's looking after mom's finances...

Man, I'm so glad I didn't allow my dad's bias to cloud my own journey of financial "discovery".


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## burglar (4 August 2014)

Craton said:


> ... Man, I'm so glad I didn't allow my dad's bias to cloud my own journey of financial "discovery".




My dad's bias drove me!
My mom's fear made me fearless!!


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## Smurf1976 (4 August 2014)

Craton said:


> He said the s/market was a lot of b/s and I never found out why he distrusted the s/market so much. Perhaps being born Italian in 1923, he would have remembered the tough Depression years and then the lead up to WWII




Influences at that age tend to stay with someone for life. Not much more can be said on that really, if someone grows up amidst chaos and is of the understanding, for whatever reason either wrong or right, that the stock market is part or all of the cause of their troubles then they'll be unlikely to ever willingly go near it as an adult.

It's the same with anything really. Once bitten, twice shy. Reading about history is one thing, living through it is entirely different. Just like people will live unhealthy lifestyles etc and ignore all advice and experience of others. 

Personally, I grew up amidst difficult financial circumstances. Not depression era stuff, but difficult nonetheless. Suffice to say that I've never had a problem saving money as an adult, not once, and the prospect of not having an income is very firmly wired into my brain. I'm not an outright miser, but you'll never likely convince me that throwing money away at an actual casino is in some way fun or entertaining. It's just wired into my brain really, don't throw money around for the sake of it. Either get something of value for it or just keep the money. I doubt that will ever go away as long as I live.


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## Craton (5 August 2014)

Adding to that Smurf1976, I'd agree about the wiring but a willingness for self discovery and a willingness to change can rewire that predominance/preset.

I would also suggest the social mindset was a lot different back then too. Dad certainly wasn't one for rocking the boat. Me, on the other hand...


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## barney (5 August 2014)

Julia said:


> Thanks for the clarification, barney.   Sorry if I sounded terse.   My frustration equals yours.
> 
> Probably we've said enough on this on this thread.




All good Julia



Craton said:


> Snap! *My dad had this dislike too*.
> 
> Nope, *dad managed all finances in our household *(typical head of the family stuff) and she was given X amount for bills and groceries and now he's gone, guess who's looking after mom's finances...




Double SNAP lol ...... Must have been the era they grew up in.

My old man is still alive, but unlike the old days he "lets" Mum have her own Bank Account ... She is not very tech savvy, but boy she learned how to withdraw money from an automatic teller pretty quick... go Mum

I think what causes a lot of negative bias in the market is the perceived subterfuge and dodgy deals swung by those "in the know".  Of course there is no such thing as Insider trading though, so people's fears are unfounded


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## aBadTrader (5 August 2014)

barney said:


> All good Julia
> 
> 
> 
> ...




Haha - I had to comment on this post because it made me Laugh Out Loud - reminded me of my Mum. Go mum indeed! 

(thinking back to the days where I had to teach her how to use eBay... Shudder)


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