Friday, August 10, 2007

The Old Man and the Sea

People make bad decisions, or so it seems from an outside observer's point of view

So, there is an old man, runs one of my favorite coffee shops, and reminds me of Hemingway and his last novel

Yesterday, he explained to me his plans to destroy his retirement fund by taking out the money and day-trading. Luckily for him, he has not yet succeeded in timing things and market is looking bad right now

I tried my best to change his mind, but I have a feeling that it did not work

People make really bad decisions in their lives

4 comments:

  1. yes, and the tragedy is that only someone that is distant can see that.

    btw, a dumb question for you: how does the invisible hand fir into this?

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  2. it is not dumb, it is a deep question that happens to be my field of research :) !!!!

    The easy answer is the Darwinian natural selection ... dumb people are filtered out and the fitters get richer ... but there are other issues and an interesting literature in economics and finance evolves around these ideas!

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  3. Now looking back to those times and knowing of the outcome, maybe he's been right. I hope he got his money out at the time...

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  4. You could be right and that is why we should avoid judging people :)

    BUT, he wanted to withdraw money from his retirement accounts to start his own trading in the stock market, I am not sure that would make him better off ...

    ReplyDelete

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