[smallmancontrov]

Also: "The stock market is the only market where people complain when things go on sale." -Warren Buffet

If you're in a "selling stock" part of your life I understand, but if you're in a "buying stock" part of your life it's worth reflecting on the quote until you can shake the "recent price action IS investor psychology" out of your head.

[mitthrowaway2]

That's very witty, but not really accurate. I think in any market where you're the seller, you will complain (or at least be grumpy) when your competitors slash prices. Especially when you're not sure the sale is temporary, and the market price is now below your cost basis on your inventory. And especially if your accountants are forced to write down your inventory value to the new, lower price.

Even when people are only buying with no intent to sell, they'll often complain if prices fall right after they've bought an item, and ask for a rebate for the difference, because they feel they deserve the new lower price. Many retailers are aware of this psychology and do offer some sort of forward-looking price match, both to help buyers overcome that hesitation, and to avoid going through the paperwork of returning and refunding a used item just to sell the same thing again anyway. But the stock market offers no such buyer protections.

[smallmancontrov]

The numbers in your brokerage account invite you to pretend that you are a seller at times when you are not. It's a nice fiction when prices are going up and a dark story when prices are going down but it's just as illusory either way. We are in violent agreement that price action is psychology, the point of the quote is to fight the loss aversion bias that was calibrated for hunting animals in the savannah not trading stocks. It's a point of fact that if you're a net buyer, gaining the option to buy at a low price outweighs losing the option to sell at a high price, and if you let the latter psych you into not taking advantage of the former you are doing yourself a very common, very human disservice.

[mitthrowaway2]

But the people complaining the most about falling prices are the sellers, of which there are necessarily many. (If there weren't, the price wouldn't be falling!)

It's not a flaw for people to think from the seller's perspective. For you to be a net buyer, someone else has to be a net seller.

Not to mention the unhappiest of all: the people who borrowed money against the value of the assets they owned.

[mejutoco]

> But the stock market offers no such buyer protections.

In some situations you can deduct losses in the stock market from the taxes to pay over the next 5 years. Not the same, but not nothing.

[seanmcdirmid]

Timing the market is hard. You might get lucky, but you probably won’t. By that reason, you are unlikely to get unlucky if your horizon for holding the stock is far enough off.

[shalmanese]

Well, that and the housing market.