The greatest failing of most investors, both professional money managers and individual investors, is a failure to understand the impact of their own very human behavior and that of stock market participants as a whole.
It is all very good to recommend caution, but decisions must be made. In truth, many policies must be established and decisions made with imperfect understanding of the facts and of the risks.
Investors always need to be alert for things that make us risk seeking. Risk seeking is bad. Risk seeking is being willing to take a risk even if the chances of success are poor. Risk seeking causes investors to lose money.
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