FEAR VS GREED

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Fear Vs Greed

Markets are operated by Humans. And they operate there to see rising prices. Because rising prices means increase in wealth. And the decrease in prices , the erosion of wealth.

And the markets are operating and throwing prices on a per second basis, and humans calculate their wealth on a per second basis, experiencing ups and downs in their wealth on a per second basis.

This is where two of the dominant emotions of humans come into play. The Greed and the fear. Increase in wealth feeds into Greed and the decrease into Fear ( unless one is a short seller in whose case the opposite will play true. Nevertheless the emotions are high).

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The thin minority who have historically done well have been very resilient to the influence of these two emotional forces. They truly practice Ben Graham’s words when he said Markets are Voting machines in the short run and Weing machines in the long run.

Hence control of these two monstrous emotions are very key to creating wealth. We would expect our investors to master these and certainly guide them to be better at these.