There is a saying that “love is blind”. This means a person in love would not be able to see any imperfection in the lover. This is maybe an extreme case. However, people do have the tendency of refusing to change their position when the relevant situation having been changed, or have bias on anything against whatever they initially believed in.
For example, a boy was brought to the same church by his parents frequently, he would not only mostly likely believe in the same religion when he grows up, but also strongly reject any other religion or atheism.
The same thing happens in stock market. When people, no difference being individual investors or institutional investors, already have a long position in the market, they tend to collect any relevant information, analyst it and present it in a way to justify that the market will go up further. The same kind of people also likely has a love affair with the company, of which they hold shares, and also with the relevant industry. They reject any information they don’t like, just like a person in love.
Continue reading “Human weakness in investment –incapable of self-reflection”