A Different Lesson in Stock Market Humility

From an emotional point of view, I shouldn't have looked, I really shouldn't have.

But I did.

In the three day period since I sold DUG, it rocketed from the 42% gain I locked in, to a 95% gain from my original buy point. And it's still not showing signs of weakness.

Dad's voice in my mind is asking, "What did you learn?" and I've come up with an answer. If I had held on to the stock into the last half hour of the trading day (instead of selling it mid-afternoon) I would have been able to see a clearer picture of its behavior for the day. In DUG's case, this would have shown me that there was no clear sell signal and it is likely I wouldn't have sold.

Jesse Livermore, a famous (or infamous, to some) stock investor at the beginning of the 1900s used to say, "People fear when they should hope, and hope when they should fear." I used to think this was a kind of indictment on those other traders who are somehow weak. But now I see that he was just making an honest observation about how we all act sometimes.

T. Harv Eker writes about each person having a financial thermostat that is defined by his or her upper and lower financial comfort zones. If the person's financial situation goes below or above that range, he or she tends to subconsciously "correct" it so that the comfort zone is maintained. Evidently, my upper comfort zone for stock trading profits is somewhere around 42%. Well worth noticing.