From The Psychology of the Stock Market by GC Selden (published in 1912): The fact is that the more a trader allows his mind to dwell upon his own position in the market, the more likely it is that his judgment will become warped. The more simple minded, after once committing themselves to a position, are thereafter chiefly influenced and supported by the illusions of hope. If prices have advanced, they hope for a larger profit. On the other hand, if prices decline they expect an early recovery. A much more intelligent class do not allow their position in the market to blind them so far as current news or developments are concerned, but do permit themselves to become biased in regard to the most important factor of all – the effect of a change in the price level. They bought stocks in the expectation of an improved situation. The improved situation comes and prices rise. Nothing serious in the way of bear news appears. On the contrary bull news continues plentiful. Under these condi...
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