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My Sunday Washington Post Business Section column is out. This morning, we look at the motivations of various market commentators.

The study of investor bias and psychology has long fascinated me. This column revisits the subject of different roles investors must play in order to confront these problems. I tangentially mentioned this in one of my first columns for WaPo.

The online version is titled Pay close attention to what’s motivating market commentary while the print edition had the headline Suit up in your best barrister gear: Good investors often play trial lawyer.

Here’s an excerpt from the column:

“If you consume lots of stock research or market commentary — or much of anything from the financial media — then you will find this exercise especially important. Let’s look at the motivations of various pundits, strategists and fund managers. Suit up in your finest barrister gear; we are going to play “cross-examining litigator” for fun and profit…”

As you expect, all of the above players — including your humble author –  have biases. Some are obvious, some more hidden and insidious.

 

 

Source:
Pay close attention to what’s motivating market commentary
Barry Ritholtz
Washington Post, May 4 2014
http://wapo.st/1nfUPqw

Category: Apprenticed Investor, Financial Press, Investing, Psychology

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One Response to “Consider the source — and motives — when taking investment advice”

  1. Mayson says:

    An interesting post by Fred Wilson at avc.com: he ends with the self-aware observationn

    “Epilogue: I am a VC. I am talking my book here. I don’t like to pay sky high valuations. And I like to argue against them. So understand this post in that context. But I am also an investor in companies that have found, and may or will find themselves in the valuation trap. I have lived it, felt it, and suffered from it. It is a real issue.”

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