Meir Statman : How Pride Can Distract Investors : The Globe and Mail
Meir Statman, Glenn Klimek Professor of Finance, was quoted in a piece by The Globe and Mail titled, “How not to be your own worst enemy in the markets.” In the article, Professor Statman discusses the immense pressure on investors to “beat the market” and overperform-- a pressure which oftentimes can distract investors from rational thought.
From the article:
“Everyone wants to be exceptional, Prof. Kramer says, ‘so there’s this pressure to beat the market. We all want to feel that we’re better than average, but there’s no shame in being average.’
The pressure of pride has a tendency to distract investors from the rational end of a stock rally, says Meir Statman, a professor of finance at California’s Santa Clara University and author of What Investors Really Want.
‘If you made the right choice to buy a stock, and you think you’re a genius,’ and keep trading blindly, he says, ‘eventually you end up losing like gamblers in a casino.’”
Find the full piece here »
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