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 VIII. The Mental Attitude of the Individual, 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 previous chapters we have seen that many, if not most, of the eccentricities of speculative markets, commonly charged to manipulation, are in fact due to the peculiar psychological conditions which surround such markets. Especially, and more than all else together, these erratic fluctuations are the result of the efforts of traders to operate, not on the basis of facts, nor on their own judgment as to the effect o
Readers studying financial history, investment education, and the chapter’s specific subject—mental attitude, reasoning optimist, hunch—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 mental attitude, reasoning optimist, hunch may differ sharply from modern markets.