Affinity and Biases

"We feel an affinity with a certain thinker because we agree with him; or because he shows us what we were already thinking; or because he shows us in a more articulate form what we were already thinking; or because he shows us what we were on the point of thinking; or what we would sooner or later have thought; or what we would have thought much later if we hadn’t read it now; or what we would have liked to think but never would have thought if we hadn’t read it now."

— Lydia Davis

SIDE COMMENT: This is actually one whole short story by Lydia. If you loved it and its length, you should buy The Collected Stories of Lydia Davis. That book will give you tons of reading pleasure.

For Newbies--

There are 'predators' (out to get your money) scattered in forums that are presenting themselves as oh-so experts. And they are experts indeed in phrasing their recommendations according to what appeal to your biases. Usually an issue that is lightly-traded (bazura) will be recommended for an upcoming big jump up, because the item is ultra-solid fundamentally, and that management have something up their sleeve, that good news is coming soon, and that this issue will yield 30 - 100 % in few short weeks. And that you should enter now before the increase starts, etc. These persons will also add something about earning big bucks recently from this issue, or compare the upcoming jump to another stock that made a similar leap, and where before they rode and where they gained hundreds and thousands of profit a few months ago--implicitly saying that you should join them on the bonanza this round.

Be careful taking advise. You should know yourself. Before acting on a recommendation, stop and reflect/self-introspect--what personal bias (greediness, tolerance for risk, for example) is being strummed in you? Sometimes they even dare--are you brave enough? You can double your money in one month if you are brave enough! (And who wouldnt answer yes, I want! Im brave! I want money! Money!)

When an honest reco should be asking--do you have time to do research yourself and read disclosures first?

In general, be suspicious if they are recommending bazurs (very lightly traded). If you decide you want to get in anyway with PHA, MACAY, TUGS, and other obscure issues, do it by all means for the adventure. (There are also manipulators' favorites like CAL, BHI, MED). Just make sure you have the stomach to cutloss--accept defeat--when the fall is impending deep and apparent. And again, only get in in Bazura when you have the time to monitor.