Bull markets make you feel smarter than you are
13 days ago
- #psychology
- #investing
- #market cycles
- Bull markets can make investors feel overconfident, while bear markets can make them feel underconfident.
- Benjamin Graham's early success in the Roaring 20s turned into significant losses during the Great Depression due to overconfidence and leverage.
- Graham's experience highlights the dangers of hubris and the importance of humility in investing.
- Jim Paul's story in 'What I Learned Losing a Million Dollars' illustrates how success can set up failure by distorting psychological perceptions.
- Current bull market successes should be tempered with the understanding that markets will eventually correct, and overconfidence can lead to future losses.