MICHEL PIREU: Winning or losing, staying in the game is the thing for some investors
Traders could be uncomfortable with winning or get a lot of excitement from losing
Why do we buy the stocks we do? According to Terrance Odean, professor of finance at the Haas School of Business at the University of California, individual investors mostly buy those stocks that catch their attention, that have experienced extreme price moves or that are in the news.
The reason is that we have a huge search problem when it comes to finding an individual stock to buy; we’re not equipped to deal with the hundreds of options that are available to us daily and most of us solve this, unconsciously, by only considering those stocks that catch our attention.