It deals with the psychology, the highs and lows as well as the emotions regarding the market and very importantly the risk factor associated with the type of person you are. From a number of tests it showed very clearly using economic students to bid for items in an open environment after giving each student to firstly write down on a piece of paper what they thought the item was worth and then in the open auction bid for the item. Interestingly, most bid far higher than what they estimated an item to be as fair value when they first wrote it down. In one auction for a Cup/Mug, the person who won, bid 50% above what they had originally estimated as fair value.
Everything that they had learnt was thrown out the window in one split second in order to win. It goes on to describe the various "Bubbles" that have taken place from as early as the "Tulip" bubble to the most recent GFC.
I have an addictive passion for the market and have been in it since 1985. Endured the highs and lows and very similar to golf i have learnt alot about myself especially my tolerance level. Was wiped out in 87. Got hit badly early 2002 and lost a bundle. It severely affected my health as well as my marriage and in the long term my business. I ended up developing Psoriasis which generally is associated with stress and trauma. Took time out for a couple of years to get my marriage back on track as well as my health issues. Unfortuneately, once you get Psoriasis it never leaves you. It is at least manageable with various ointments. Why am i telling you all this?
Well, at the end of the day we can blame the Burnie Madoffs of this world, the greedy banks, the governments, the institutions, the management of the companies that we are invested or trading in. Yet, we make our own choices and have to live with that if everything goes pearshaped. The aftermarth IMHO is the most important learning curve. Its during those dark valleys that you learn so much about yourself where you have the opportunity to fight another day through the wisdom gained, hopefully lessons learnt.
As with Golf i still occasionally try to hit the cover of the ball to no avail. However, i don't do it nearly as often as i used too. Maybe, somewhere i am finally learning a bit more about myself along with my risk tolerance.
