What I Learned Losing A Million Dollars

we mutually congratulated each other on our wisdom and knowledge and for all the money we were now going to make—not the money we had made but the money we were going to make.

Because a losing market position is a continuous process, nothing forces you to acknowledge it as a loss;

Managers and corporate executives can become too attached to a project and personalize it, and they are susceptible to the losses due to psychological factors

The big difference is: gambling creates risk while investing/speculating assumes and manages risk that already exists.

There are three main characteristics that describe the mental state of an individual forming a part of a crowd. As you will see, the same characteristics can also be exhibited by an individual making investment and trading decisions. 1. A Sentiment of Invincible Power

only opinions can be right or wrong; facts cannot.

that it is the characteristics displayed, not the activity itself, that define whether they are betting, gambling, speculating, trading, or investing. This lack of understanding means people are prone to exhibit the traits of betting or gambling on a continuous process (i.e., the market) rather than a discrete event where such activities belong.

Once you specify what price or under what circumstances you would no longer want the position, and specify how much money you are willing to lose, then, and only then, can you start thinking about where to enter the market.

It was the absolute lowest point in my life. I had gone from having everything on August 31 to nothing on November 17.