Why Being "Rational" Usually Fails When Making Investment Decisions
By Tom Madell
Without wanting to sound presumptuous, this may be the most unusual investment article you are likely to ever read. Why? Because it likely goes against everything about investing you may have ever have considered.
The article consists of two related parts. The first part deals with deciding whether or not to invest at all. The second part tries to shed some light on making more specific buy/sell decisions. In both cases, I argue that using apparently reasonable and logical information to help make investment decisions may not turn out favorably. Feel free to skip the first part if you are already committed to a long-term program of investing.