In case you didn’t see my Saturday morning note, it seems to have struck a chord with a lot of people.
You see, somewhere along the way, people ignorant to reality just assumed that if we did a better job of educating investors, then it will prevent them from making reckless decisions in the stock market.
It’s so adorable to believe that.
I mean, you can tell yourself it’s all rainbows and butterflies, if you want to. You have that right.
But it’s complete nonsense. The truth of the matter is that it’s an ugly world out there. Grow up.
You can try to help these people all you want. It’s not going to matter. That’s just not how humans work.
I reached out to a colleague who’s much better on the science side of this, and here’s what he had to say,
“If there’s one thing we know from Behavioral Finance it’s that education doesn’t do a whole lot to change behavior. Especially when big money is on the line. I don’t like to pick fights with those folks because “we don’t need education” is an inherently unpopular position, but facts are facts.”
I’m fascinated by human behavior. It’s what I’ve been analyzing every single day for almost 20 years. The one thing I’ve learned for sure is that people are freakin nuts! [Read more…]