WFH is a WKF
We came up with a theory many years ago to address how important psychology is to owning common stocks. We found that the risks go up in a stock market, or in an individual stock, when a “well-known fact” (WKF) was acted on in the extreme. It is a leading cause of stock market failure for professional and individual investors alike. In our world, a well-known fact is a body of economic information which is known to everyone, has been acted on by everyone and has attracted the most speculative investors (aka investors using borrowed money or options).
November 10, 2020
