The Psychology of Speculation. English-only reading by default; switch among English, Chinese, and Spanish, or compare languages side by side.
This chapter examines WHIMS AND FALLACIES IN SPECULATION, using the author’s early-twentieth-century investment framework to explain how investors were expected to judge security quality, income, risk, and market conditions. It opens from the chapter’s own discussion: Traders and investors too often become stubbornly insistent on recouping their stock market losses in the same identical securities in which they lost their money. After having lost a large sum of money there is undoubtedly a special gratification in seeing it return by the same channel through which it escaped, but the enjoyment of this peculiar satisfaction is hardly commensurate with the risk that many people run
Readers studying financial history, investment education, and the chapter’s specific subject—receivership, bankers and insiders, open stop loss order—will get the most from this section. It is not suitable as a modern trading or investment checklist.
Read this chapter as historical investment education. The market rules, disclosure practices, securities, commissions, interest-rate conditions, and investor protections around receivership, bankers and insiders, open stop loss order may differ sharply from modern markets.