Observations on
Psychology and the Markets
Contrarian investing has always been a fascination of mine. From the first time I read Humphrey Neill's classic book The Art of Contrary Thinking, I've been watching magazine covers, newspaper headlines (above the fold, of course) and anything else that can suggest what the masses are thinking...
I've read Shane Parrish's Farnam Street blog for years, and as a result have developed a real appreciation for Charlie Munger's approach to investing and thinking and life. I'm so glad I finally read Shane's transcript of Munger's Herb Kay Memorial Lecture from 2003. I'd encourage you to take the time to read the entire speech, as he covers so much ground with his signature mix of dry humor and healthy cynicism.
JC Parets, a very capable technician as well as fellow wine aficionado, wrote a great post on All Star Charts comparing sommeliers to technical analysts. Specifically, he discussed the methodical way in which sommeliers evaluate a wine during a tasting to the methodical way that a technical analyst reviews the weight of the evidence...
"Two roads diverged in a wood and I... I followed price... because that's what is most important." -David Keller
So I posted this recently on Twitter
