MICHEL PIREU: Self-confidence is but one tool in stock market wizards’ box of tricks
We think we are right far more often than we really are. We overestimate our degree of knowledge and our chances of success. The implications can be ruinous
In his book Stock Market Wizards, Jack Schwager notes that a common attribute of successful investors is their high level of self-confidence. “The more interviews I do with Market Wizard types,” said Schwager, “the more convinced I become that confidence is an inherent trait shared by these traders, and is as much a contributing factor to their success as a consequence of it.”
Michael Masters, who launched his fund with almost no record of success, said he knew that if someone else could make money trading, so could he. Michael Lauer said one of the things that gave him confidence in going out on his own was that fund managers were his clients when he was an analyst, and he thought they would “not be particularly difficult to compete against”.