Vanity Michel Pireu     | Business Day Wednesday, April 3, 2019
From Why You Win or Lose The Psychology of Speculation by Fred C. Kelly (1930):

Because of vanity, men hate to be compelled to do anything. We hate to concede that even a panic can make us sell stocks that we hadnít planned to sell. Hence men mortgage their homes to raise more money to give to the broker, when swallowing pride a little sooner and taking a small loss would have avoided most of the trouble.

It is vanity that makes men sell good stocks and keep poor ones in times of distress. They wonít sell the poor ones, because they represent a loss: but they dispose of the gilt-edged things that will show a profit.

It is vanity which makes nine people out of ten, in declining market, persistently buy more of the same stock in which they took a licking Ö Instead of quitting a stock which seem to prefer to go down and climbing aboard one which shows resistance to the decline, they say to themselves: ďIíll teach that stock a thing or two; it neednít think it can throw me for a loss.Ē The weaker the stock is, the more they buy as it slides downward. They return to kiss the hand that struck them.

Usually it is far safer to average upward than downward Ö The beauty of averaging on the way up is that you are buying with profits. But even though you have a profit, your vanity is hurt somewhat by the knowledge that you didnít do all your buying at the bottom.

It must be vanity which makes a man carry stocks on the margin Ė since by that method he can buy 100 shares when he can really afford to buy only 30.

Perhaps it is vanity which makes a man believe all the stories put out for public consumption by professionals.
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