From Why You Win or Lose The Psychology of Speculation by Fred C Kelly (1930): Because of vanity, men hate to be compelled to do anything. We hate to concede that even a panic can make us sell stocks that we hadn’t planned to sell. Hence men mortgage their homes to raise more money to give to the broker, when swallowing pride a little sooner and taking a small loss would have avoided most of the trouble. It is vanity that makes men sell good stocks and keep poor ones in times of distress. They won’t sell the poor ones, because they represent a loss but they dispose of the gilt-edged things that will show a profit. It is vanity that makes nine people out of 10, in a declining market, persistently buy more of the same stock in which they took a licking … Instead of quitting a stock that seems to prefer to go down and climbing aboard one that shows resistance to the decline, they say to themselves: "I’ll teach that stock a thing or two; it needn’t think it can throw me for a loss." The...
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