Can You Relate?

dryflower

Let's say you have a $100,000 portfolio. On a given trading day, the numbers show an increase in value of $500. Within that portfolio is a small position in a stock that blew up and shows a 20% ($1,000) decline for the day.

Are you generally satisfied because you had an increase of 0.5% for the day? Or are you despondent over the stock that blew up? I fall in to the latter category, but it seems illogical. Can you relate? And is there a way to make myself be more rational?

Derf

Can you relate ? Have a scotch or brewski & "RELAX"!
Derf

Crash

I have stopped investing in single stocks, period. My timing has always been awful. Funds for me, now. Another factor has been customer "service." In most instances, the intermediary was providing customer DIS-SERVICE, rage and aggravation. (Can you say, Call Center in The Philippines? Or another Asian source? Where the agents ALWAYS can ALMOST speak English? That's fine, in an everyday conversation, but not when you need a PRECISE response.)

davidrmoran

dryflower said:

Let's say you have a $100,000 portfolio. On a given trading day, the numbers show an increase in value of $500. Within that portfolio is a small position in a stock that blew up and shows a 20% ($1,000) decline for the day.
Are you generally satisfied because you had an increase of 0.5% for the day? Or are you despondent over the stock that blew up? I fall in to the latter category, but it seems illogical. Can you relate? And is there a way to make myself be more rational?

Loss aversion and overrating (overvaluation) of loss, resulting in serious, meaning behavior-altering, flinching are long-studied in investing and elsewhere, so I dunno.

There are not many ways to make ourselves anything one way or the other, ways that work and stick, although painful aversion and strong-pleasure reward do sometimes, as we all know. (Dog training, etc.)
A drink might help, sure, or meditation, or insight-oriented psychotherapy, say, as with everything else in life. Education ('rational') helps with some, being eye-opening and all that, but usually by the time we're using words like despondent, it takes a combination of experiences. And even then.

hank

Yes - but only when the fund that “blew up” is held within my speculative sleeve (the equivalent of gambling). That represents anywhere from 0-15% of investments. One of the spec holds, PRLAX, has gotten shelled the past 3 or 4 sessions after rising in value for several months. WTF do I know about what’s currently going on in Brazil, Mexico or Argentina? ... Nothing!
Peter Lynch said to invest in things you understand. I went and did the opposite.

The torture process doesn’t carry over to the other 85-95% that’s held inside the static allocation. On any given day, some parts will shine while others fizzle. That’s an accepted part of being widely diversified.

FD1000

I'm more comfortable losing $1000 in a mutual that losing $500 in stocks. There is no logical explanation but that's how I'm wired and why I only trade stocks hours to days.

ProtonAnalyst33

FD1000 said:

I'm more comfortable losing $1000 in a mutual that losing $500 in stocks. There is no logical explanation but that's how I'm wired and why I only trade stocks hours to days.

LOL. I am the same. I think I get annoyed at the work it takes to have conviction about one stock....then it doesn't work out.

Sven

Not my type of investing and my timing is off most of the time.