The CDY threads would be a goldmine for research psychologists...

The CDY threads would be a goldmine for research psychologists specialising in behavioural economics. The irrational emotions that determine share prices are all there for analysis.

Debate on the threads is ever present between those with an investment mindset based on fundamental valuations and those with a trading mindset that goes no deeper than believing that share price movements have some hidden fundamental meaning.

I find it comforting to have it confirmed that low share prices stem from the negative mindset of those determining them rather than from any issue with the business, and use of the IGNORE option would remove that advantage.

It is easy to associate with some of the relevant quotes below. I’ll leave it to individual readers to find familiarity with the comments.

The first results from an exploratory visit to a stock forum by the CEO of a large London-based firm.

This can be a simple case of paranoia
“I was particularly intrigued by a lengthy thread about another of our corporate clients that, in the round, completely misrepresented the current reality within the business. Not because the company was failing to inform the market - the thread's trigger was a news release to the stock exchange - but because an odd confection of inexpert amateurs was rooting through the release in a spirit of paranoia searching for a hidden meaning that did not exist. A fall in the share price of a couple of pence was seized on as confirmation of suspicions and heightened the frenzy. In the end I was glad to log off with my sanity intact.”
Edmond Warner, Chief Executive of Old Mutual Securities

The second is extracted from a book by investing psychologist Dr Richard Geist, commenting on irrational negativity.

Investor Therapy
“Without an excuse to find fault in the external world, these investors would have to confront their own external confusion, sense of chaos, and paranoia. By creating an external event to fear, such as incompetent or corrupt management, they can organize their internal confusion and direct their internal anger toward an external target rather than having to believe they might be a bit paranoid.”

The third appears to include advice for HC posters.

How to Deal With Chronic Complainers
“Do not try to convince a chronic complainer things are "not as bad" as they think they are or suggest they are "over-reacting" to events and situations. This will only compel him or her to mention 10 (or 11?) additional complaints or dissatisfactions you have not yet heard about, that might give you a better understanding of how terrible their lives actually are.”

Reading through the CDY threads’ regular entertainment I often am reminded of an episode of Faulty Towers centred on a couple of guests who are research psychologists. The episode finishes with one commenting to the other:
“There’s enough material here for a whole conference”.

Cheers

T7