Maniac Investment
Let's first understand what maniac means. According to Webster a maniac is "mad; raging with madness; raging with disordered intellect". You don't know anyone like that, do you?
There is a book that is still in print today that was originally published in 1841 with the title Extraordinary and Popular Delusions of Crowds by Charles Mackay. He explains in rather horrific detail how people were caught up in the madness of buying property in the South Seas in 1720, the numismatic coin craze of 1980 and the tulip bulb trading in 1637. You wonder how people could have been so gullible to have bought a single tulip bulb or land they would never see for huge amounts of money. Could anything like this ever happen again?
I was floor trader on the commodity exchange in 1973 when the Hunt brothers drove silver from $2.00 per ounce to $54. That mania lasted a few months and quickly tanked to $6.00. I took part in that mania. I was one of the maniacs.
When it was taking place it seemed like the thing to do and very few questioned the sanity of those participating. In fact, if you weren't part of the crowd there was something wrong with you. When there is a stampede it is best to run with the herd or be trampled to death. However, there were a few who were not mesmerized.
Today we are participating in one of those manias only now it is called a bubble and still is not being taken too seriously. Yes, it is the stock market mania. Many are still trapped in the madness of the crowd of the 1990's who believe the "market always comes back". They are clutching their tulip bulbs, sorry, stock certificates, and refuse to let go of them because they know their value will grow back to what it was 3 years ago. Stock owners have become mad with what - greed? fear? denial?
When something, almost anything, drops 50% in price it will take a 100% increase in value to get back to "even". With today's economic and world conditions that could be a long time and maybe not in our lifetime.
Years ago I heard a story about how they used to catch monkeys. A small hole just big enough for the monkey to slip his empty hand inside would be drilled in a coconut and candy and fruit would be put in it. The coconut was tied to a stake in the ground. When the monkey grabbed a fistful of goodies he would not let go even when the hunter came for him. Greed holds him in an invisible grip.
Many investors today are like those monkeys. They refuse to sell what is remaining of the stocks and mutual funds they own even though they can clearly see the major trend continues down. They became mad with greed and now fear of loss entraps them.
Until this madness is recognized investors will continue to see their portfolios become smaller and smaller. They must learn to let go.
Written 3/10/03 but still applies today.
INVESTMENT LETTER 3 month free trial. http://www.mutualfundmagic.com
Copyright Albert W. Thomas All right reserved. Author of "If It Doesn't Go Up, Don't Buy It!" Former 17-year exchange member, floor trader and brokerage company owner.
Latest News
![]() Telegraph.co.uk | CIC Head Wary of Investing in Western Banks Wall Street Journal - Lou Jiwei, who head's China Investment Corp., said the uncertainty surrounding Western banks and the policy decisions that may determine their fate makes it ... CIC weary of Western banks China's sovereign wealth fund to avoid western financial firms: report CIC Now Very Wary of Investment in Foreign Financial Firms |
Dividend Investing for Monthly Income Seeking Alpha, NY - After you have selected the dividend growth stocks that fit your selection criteria, it is time to research their payment dates. Most dividend investors try ... |
Is Real Estate Investing Our Best Shot at Wealth? Seeking Alpha, NY - 91 percent of homeowners surveyed by real-estate-services firm Realogy Corp. thought that owning a home was the best long-term investment they could make, ... |
ETF Investing: 5 Pitfalls to Avoid U.S. News & World Report, DC - By Kirk Shinkle Security, transparency, low costs: It's the mantra of the exchange-traded fund industry, and by and large, most ETFs do live up to the ... Invesco PowerShares Announces Zero Capital Gains Distributions for ... Managing a Portfolio in a Bear Market Building a Portfolio Using ETFs |
![]() Boston Globe | Global Investing Roundups Money Morning - The world’s biggest nuclear utility company, Electricité de France SA will offer as much as $6.5 billion for assets of Constellation Energy Group, ... Delayed quote data |
Criterion Investments Scoops Canadian Investment Marketing Award ... MarketWatch - The same applies to investing in long-term growth themes, and Criterion built the case for why now is time to get ahead of the curve by investing in water ... Making a bet in a free-fall market |
PureWave Networks Completes a $12 Million Series B Funding Round MarketWatch - The firm consists of experienced individuals with extensive operating and investing experience, and takes an active role in helping its portfolio companies ... |
Ziegler Exchange Traded Trust Announces Change to Previously ... MarketWatch - Prospective purchasers of the NYSE Arca Tech 100 ETF should consider the investment objectives, risks, charges and expenses carefully before investing. ... |
Washington Post | Fidelity to Roll out New Home Page Providing Real-Time Financial ... MarketWatch - "Investors today need timely and reliable financial information to make smart investing decisions, especially in times of market and economic uncertainty," ... Online Money: Fidelity expands online news focus |
Your Once-in-a-Lifetime Investing Opportunity Motley Fool - But it was investment banks and financial institutions -- the largest and fiercest players on Wall Street -- that were literally ground zero for this ... |
Resources
-
No Money Down - Creative Real Estate Investing!
Learn how to control real estate Without credit checks and no money down! You can Buy With No Credit!
-
real estate foreclosures- home69
Proven real estate Investing course specializing in foreclosures and pre-forclosures.
-
Real Estate Investing
How To Start And Run Your Own outrageously Profitable Fixer-Upper Business In As Little As 45 Days, even If You Can
-
Foreclosures - Real Estate Investing - Short Sales.
Learn about foreclosures and real estate Investing techniques like short sales and subject to financing
-
Online Trading for Financial Freedom - stock daytrading strategy.
Stock index trading strategy for beginning and experienced traders alike.
-
Real Estate Investing - Foreclosures
How To Start And Run Your Own outrageously Profitable Fixer-Upper Business In As Little As 45 Days, even If You Can
-
Real Estate Investing Course for Profits in Investing
Real estate Investing course reveals proven real estate Investing strategies using Lease Options and Creative Financing where you can earn big money Investing in real estate with no down and no credit
-
Make money stock trading, day trading, Investing and trading options like the pros!
Turn $200 into $4,630 in 30 days by trading options online from your home PC. Step by step instructions for novices or investment pros. Make money stock trading, day trading, Investing and trading options like the pros!
-
Make real money Investing in real estate by Lou Vukas
Lou Vukas gives you the insider secrets to making real money in real estate regardless of your credit, finances or location at realestatefortunes.com.
-
Real Estate Investing
eBook on Real Estate Investing and Real Estate Marketing

