Valuation-Informed Indexing #705: The Paradoxes of Investor Emotiom

I’ve posted Entry #705 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Paradoxes of Investor Emotion.

Juicy Excerpt: The problem is that, when people act on emotion, they are often not aware that that is what they are doing. No one says: “I bought my car because I fell in love with the color.” That sounds like a dumb thing to do. So we talk about how the car gets good gas mileage and performs well on safety tests and maintains a good resale value. Those things might well be so. But salespeople will tell you that often people fall in love with the look of a car and then look for rationalizations for their desire to purchase it and that the stated reasons for buying it are not necessarily the true motivators of the sale.