Topic: How To Invest

What is Pat’s commentary for the week of July 05, 2017

Article Excerpt

There’s a hidden lesson—the proverbial “grain of truth”—in many tidbits of investor wisdom. For example, consider the stereotypical investor saying that market sentiment sloshes back and forth between fear and greed, like water in the hull of a ship. It’s a powerful image, but it provides little help for learning or self-analysis. After all, investors rarely say, “I’m feeling fearful today. I think I’ll call my broker and sell all my stocks.” Or, “I woke up feeling greedy this morning. I think I’ll go down to my bank and get a line of credit so I can buy more stocks.” But these are the two opposing extremes that the saying refers to. You might find it more helpful to think of the two extremes as Malthusianism and Cornucopianism. Malthusianism refers to the writings of Thomas Robert Malthus (February 1766–December 1834), an English cleric and scholar. He wrote about politics, economics and demography. Malthus is best known for his prediction that mankind was doomed to…