MICHEL PIREU: Lessons from the crash: you will get burnt by smoke and mirrors
Excerpts from articles published in the midst of the 2008-09 financial crisis that are worth recalling: • "It is all an emotional dance orchestrated by our own chemistry." — Phil McDonnell. Austin Edwards, writing in the Motley Fool, noted that whereas most of us turn to sulking, worrying and even panicking when things go sour, the tougher, smarter, more successful people do something different: "They learn from it." Austin asked his readers to share with him what they’d learnt from the crash. Among the many replies: "…that ‘reversion to the mean’ is not something to mess with"; "…that if you don’t take profits you can easily watch them turn into losses"; "…that selling after a 20% drop can still put you way ahead"; "…to be sceptical of the financial industry and do your own research"; "…that cash-flow issues affect you eventually, but balance sheets can blow up overnight"; "…that if you’re highly leveraged you have to sell even your best picks when the worst go south"; "…that being...
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