In the interest of self-awareness, the predator/prey scenario, the Pareto principle, and provide a little levity, forthwith is a list of investor and trader "classifications". We ALL fall into at least one category.
1. ETERNAL OPTIMISTS: Can't lose and IF losing, doesn't cut their losses. Pride in the buy and hold and long term investor (by default rather than design) concepts.
2. HYPERACTIVE: In and out with no NET progress. Addicted to random returns and immediate gratification. Money made on one is pissed away on the next.
3. PLUNGERS: Everything into ONE position. Eh...... less than a smooth equity curve.
4. GROUPIE: Buys WHAT well-known people are supposedly buying. In the US, Warren Buffett comes to mind.
5. PRUDENT: Execution governed EVERY step of the way. Trigger often isn't pulled. Late entries. Selling too soon. Not enough position size to capitalize when one is correct.
6. EDUCATED FOOL: Bound to THEORY but limited in practice. This may include redundant indicators. Using (5) different oscillators which basically portray the "same" thing.
7. HEDGER: Not to make money BUT to preserve capital OR avoid paying tax.
8. TAG-A-LONG: "I'll buy WHATEVER you're buying". This would include getting "advice" from message boards television shills, and even friends/neighbors/relatives/co-workers/Shoeshine Boys and Cab Drivers. A less selective variation of #4 the Groupie.
9. MARKET MASOCHIST: Someone to BLAME, such as the evil short sellers, manipulative market makers or the government.
10. CONTRARIAN: And contrary for JUST the sake of being contrary. Not necessarily wrong, but often very early. A stock's too high, it must go down.
11. SERENDIPITY: Bought the bank stock BECAUSE the tellers are nice. Yesssssssss, there are people like this.
12. GREATER FOOLS: AFTER the fact. The proverbial bagholders. Each share is always owned by someone. They provide a necessary function in the distribution of paper.
13. TRENDY: Owns/buys what is in FASHION. Microsoft 10 years ago, Google at present. A case could be made for RIMM too.
14. "INSIDERS": Has the proverbial brother-in-law that KNOWS something. Unfortunately, not enough.
15. EGOTIST: Takes more satisfaction from being RIGHT than from adding to their equity.
16. SCALPER: Takes advantage of MOB psychology and doesn't over-stay the party. Repetition and familiarity. Hmmm, helps to have a floor seat to minimize transaction costs.
17. KAMIKAZEE: EXTREME version of #3, the plunger. Can you say fully margined? Total disregard for position size and risk.
18. OPINION HUNTER: The MAJORITY knows best and their is safety in numbers. Basic herd instinct. This may include the feeling left out at the open. Opposite of #10, the Contrarian.
No doubt, you the reader can think of some more (which is another reason why I typed this). I'd like to be aware of those I haven't pondered.
1. ETERNAL OPTIMISTS: Can't lose and IF losing, doesn't cut their losses. Pride in the buy and hold and long term investor (by default rather than design) concepts.
2. HYPERACTIVE: In and out with no NET progress. Addicted to random returns and immediate gratification. Money made on one is pissed away on the next.
3. PLUNGERS: Everything into ONE position. Eh...... less than a smooth equity curve.
4. GROUPIE: Buys WHAT well-known people are supposedly buying. In the US, Warren Buffett comes to mind.
5. PRUDENT: Execution governed EVERY step of the way. Trigger often isn't pulled. Late entries. Selling too soon. Not enough position size to capitalize when one is correct.
6. EDUCATED FOOL: Bound to THEORY but limited in practice. This may include redundant indicators. Using (5) different oscillators which basically portray the "same" thing.
7. HEDGER: Not to make money BUT to preserve capital OR avoid paying tax.
8. TAG-A-LONG: "I'll buy WHATEVER you're buying". This would include getting "advice" from message boards television shills, and even friends/neighbors/relatives/co-workers/Shoeshine Boys and Cab Drivers. A less selective variation of #4 the Groupie.
9. MARKET MASOCHIST: Someone to BLAME, such as the evil short sellers, manipulative market makers or the government.
10. CONTRARIAN: And contrary for JUST the sake of being contrary. Not necessarily wrong, but often very early. A stock's too high, it must go down.
11. SERENDIPITY: Bought the bank stock BECAUSE the tellers are nice. Yesssssssss, there are people like this.
12. GREATER FOOLS: AFTER the fact. The proverbial bagholders. Each share is always owned by someone. They provide a necessary function in the distribution of paper.
13. TRENDY: Owns/buys what is in FASHION. Microsoft 10 years ago, Google at present. A case could be made for RIMM too.
14. "INSIDERS": Has the proverbial brother-in-law that KNOWS something. Unfortunately, not enough.
15. EGOTIST: Takes more satisfaction from being RIGHT than from adding to their equity.
16. SCALPER: Takes advantage of MOB psychology and doesn't over-stay the party. Repetition and familiarity. Hmmm, helps to have a floor seat to minimize transaction costs.
17. KAMIKAZEE: EXTREME version of #3, the plunger. Can you say fully margined? Total disregard for position size and risk.
18. OPINION HUNTER: The MAJORITY knows best and their is safety in numbers. Basic herd instinct. This may include the feeling left out at the open. Opposite of #10, the Contrarian.
No doubt, you the reader can think of some more (which is another reason why I typed this). I'd like to be aware of those I haven't pondered.
