Day: November 10, 2020

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).

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