behaviour
Know your own game
The rule
Play your own game. A quick trader in for one week and a saver in for twenty years can both be right. Copy the trader, and you get hurt.
Where it flips
Guarding your plan can turn into ignoring truly better ways. Where it misleads: you shut your ears to everything. The fix: keep learning from new facts, but only from people in your own game.
Two people can look at the same stock. A trader wants a gain this week. A saver wants steady growth over many years. Both can be right for their own plan. The trouble starts when you copy someone whose plan is nothing like yours. A move that is smart for one week can be silly for ten years.
A worked example
A long-term saver hears a trader boast that he sold a stock. So she sells too. But the trader was in for one week. She was in for twenty years. She dropped her own plan to copy his, and lost out. [illustrative]
How to spot it
- ·copying a move without knowing how long the other person will hold
- ·reacting to daily ups and downs inside a long-term plan
- ·acting on a tip from someone whose goal is not your goal
Morgan Housel · The Psychology of Money