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The psychology of speculation

Chapter 10: THEY ALL RESOLVE, BUT THEY ALL GO BACK
By Henry Howard Harper
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About This Book

The author examines psychological and social forces that drive stock market speculation, arguing that personal impulses, sentiment, and panic often override rational principles. He surveys the distracting power of continuous price quotations, the unsettling effects of sudden gains and losses, and the lure of gambling-like frenzies, bogus securities, pyramiding, and over-acquisitiveness. Drawing on anecdotes and practical observations, chapters offer warnings about common misjudgments, the limits of technical rules, and the ways market mood can defeat sound plans, concluding that disciplined self-knowledge and experience are essential safeguards against speculative ruin.

THEY ALL RESOLVE, BUT THEY ALL GO BACK

One often hears the stock trader’s sad lament,—“If I ever get even, I’ll get out and stay out!” But I never knew one of this class who ever got “out even” and I never heard of one who stayed out if he did get out even. If they get out, leaving a dollar in, they go back after it; if they get out a few dollars ahead, they go back for more; in any case they all go back. They wouldn’t be content to stay out of the market any more than a little shorn lamb would be content to stand overnight uncomplainingly in a blustering March storm, outside the open gateway to a sheepfold where his brother lambs were snugly housed.