Psychology of the Stock Market. English-only reading by default; switch among English, Chinese, and Spanish, or compare languages side by side.
This chapter examines V. Confusing the Personal with the General, 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: In a previous chapter the fact has been mentioned that one of the greatest difficulties encountered by the active trader is that of keeping his mind in a balanced and unprejudiced condition when he is heavily committed to either the long or short side of the market. Unconsciously to himself, he permits his judgment to be swayed by his hopes.
Readers studying financial history, investment education, and the chapter’s specific subject—personal commitments, balanced mind, holes in the market—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 personal commitments, balanced mind, holes in the market may differ sharply from modern markets.