STREET DOGS: Forces driving the market
Kenneth Fisher argues markets are driven by a desire to accumulate pride and shun regret
In an article entitled Caveman Investment Concepts, Kenneth Fisher argues that the markets, rather than being driven by fear and greed, are driven by a desire to accumulate pride and shun regret. "Accumulating pride and shunning regret motivates people to keep trying when otherwise they would be despondent over failures," he says. "Imagine a Stone Age day, where two men returned to camp – one dragging a gazelle, the other empty-handed. The successful hunter walks proudly into camp bragging of his success. He accumulates pride. The other hunter describes his failure as bad luck. A gazelle was within his grasp when a freak lighting storm scared it away. He’s fabricating excuses to shun regret so he can get up the next morning and try again. It’s all about survival. This motivates both the successful and the unsuccessful hunter to allow the hunt to continue the next day, when luck may strike differently." The same thought processes form today’s investment decisions. Suppose an investor...
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