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PATIENCE AND FINANCE

30 September 2010 by Cullen Roche 2 Comments

This is a few weeks old, but is a must read in my opinion.  It covers some pretty interesting parts of the behavioral finance world and generally sound investing principles.  I can’t say I adhere to everything written here, but it’s always nice to read an intelligent and fundamentally sound perspective:


Source: BIS

Cullen Roche

Cullen Roche

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Comments
  • pigfarm

    I wish I was patient enough to hold on to my shorts instead of cashing out yesterday. I’m crying on the inside.

    09/30/2010 at 2:33 PM
  • Nico

    Generally true, with notable exceptions. Consider the balancing act between deciding to take a small loss on a wrong trade vs. waiting for it to recover. It may never recover. In hindsight, one regrets not having done one or the other. Patience can hurt, too.

    At the end of the day, like Buffett says, it’s about being right, not being active. It can mean waiting for the opportunity where one knows is right (but is there such a thing in Finance?), or as more risk-averse minds would advise, renounce to high returns through diversification (a form of patience) as a protection against ignorance.

    09/30/2010 at 3:50 PM