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Paralysis by Analysis

Discussion in 'Investing' started by The Brontide, Aug 6, 2020.

  1. The Brontide

    The Brontide Active Member

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    I have from time to time succumbed to paralysis self induced. The point where you study something to the tenth degree to the point where logic no longer makes sense.

    A simple analogy if you will. When you have determined to buck a solid trend simply because the numbers 'say the trend is wrong'.

    How has Buffett put it?

    The markets can remain irrational longer than you can remain solvent.

    That to me is a reminder I refer to often when things don't make sense.


    Anyone else hit this before?
     
    TomB16 likes this.
  2. TomB16

    TomB16 Well-Known Member

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    I believe what you are experiencing is lack of confidence perhaps exacerbated by no clear technical signal. Yes, I've experienced this.

    Often times, there is no clear signal. Sometimes, there is a clear signal but it's wrong. People generally prefer clear direction, even if it is wrong direction, but it often isn't there.

    These are highly unusual times. There is no clear, correct course of action so your lack of confidence is a direct sign of competence.
     
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  3. TomB16

    TomB16 Well-Known Member

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    I have a buddy who was rejected for a home loan, two weeks ago. A couple of days later, he decided he needed to move his down payment into the markets. That was a Friday.

    He went home Friday night, read over the weekend, and by the time he met me for lunch on Monday, he was very aggressive in his presentation and had an extreme assessment of his ability to dominate the stock market. He essentially told me I would be a fool to not follow his investing direction. That was his third day in. He hadn't opened an account, yet.

    How well do you think he is going to do? Actually, I think he will probably be OK over time but I think I will continue on my present path, for now.

    Your lack of confidence is a sign of far more sophisticated thinking, IMO. There is no need to feel pressure to do something. You are going to do very well over time.
     
    The Brontide and T0rm3nted like this.
  4. The Brontide

    The Brontide Active Member

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    Like I suggested, I do find myself there from time to time. I like it as it usually tells me to not make a particular trade. I don't mind so much missing out on a score, and I certainly do not like losing. So I make conscious effort to think carefully and tell myself, numbers don't always make the choice perfect.


    Interesting similar, that my brother in law called my wife and they got into a heated discussion. He just found out gold topped up to $2k and he was adamant to tell her she must sell all stocks the market is going to crash. My wife kinda chuckled and said we got it all under control. Which if course set him off more.

    But my wife and I are in a good position. And he is one of those doom and gloomer prepper types that is just waiting to use his survival mad skills somewhere.

    Back in March when all the toilet paper went missing to hoarders, he called and told her there is a run on gas and we better tank everything up. Hated to tell him there is plenty of gas around and it was the afternoon rush hour.

    :rofl:

    That is not us though. And it pisses him off greatly.

    Kinda drifted I know. But that is certainly on point.
     

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