Even knowing the tricks that the brain can play, doesn't stop bouts of poor psychology. So, as I've stated before, I shorted Google a little while ago. I recently covered it for a loss (happy!?). It wasn't anywhere near a full position so I'm not too thrown. It's possible that I covered at the worst time, though that's to be expected. So yesterday shares in Google were down nearly 5%, in one of their biggest daily drops, and for a moment I had pangs about no longer carrying my short position. But, and here's the kicker, the price I covered at is below the price it closed at yesterday. So if I'd held my short, even through yesterday's drop, I'd have lost even more money. I should be happy about the timing of my short, not regretting it. But the brain works in weird ways, and often just the opposite of how we'd like it to.
(Disclaimer: Any discussion of my own activities does not constitute advice either to buy or sell, etc.)
Investor psychology is probably the most dangerous impediment to making money in the market. How many times have you held a stock "just a little longer" after a fall because you just can't bring yourself to take a loss on a sure thing! That is the only reason I can explain for holding Calpine... unfortunately I'm still holding it, and it was very questionably a "sure thing".
Posted by: Kevin | November 30, 2005 at 04:32 PM
just when i was beginning to like you mr. stalwart you short (King) Google?!@#%!
c'mon man -- give me one good reason why you shorted that stock.
And don't say "valuation concern(s)" -- that won't cut it...
IMO, Google is a $500 stock within 1-2 Q's.
Posted by: catablast media grp. llc | December 01, 2005 at 12:47 PM