Jason Zweig

speaker

906 appearances 17 recordings 1 series first heard Jan 2018 last heard Sep 2022

Jason Zweig’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · How to Invest Without Emotions Clouding Your Judgement · 17 Sep 2021 podcast

Decades ago, psychologists and economists found that if you gave people something, and it can be just about anything, a coffee mug, a pen, probably paperclips, they immediately place a greater value on it than they would if they didn't possess it and were asked to buy it. voice-verified

So, for example, if I give you a coffee mug, you might say it's worth $7. voice-verified

But if I ask you to buy the same mug, voice-verified

you might not be willing to pay more than $3 for it. voice-verified

And we see the exact same thing play out in financial markets where once people invest in an asset, they don't just own the asset, but they've invested some of themselves in it. voice-verified

And it becomes much harder to let go of it once they own it. voice-verified

And they place a considerably higher value on it after buying it than they would if they didn't own it in the first place. voice-verified

Well, of course people hate to lose money. voice-verified

Nobody likes a loss. voice-verified

But what you really lose when you lose money is not just dollars or whatever currency you're measuring your investments in. voice-verified

What you also lose is your pride and your sense of status and self-esteem and also your conviction that you're a really smart, knowledgeable investor. voice-verified

The real thing people hate about losing money is that they have to kick themselves and say, you know, how could I have been so stupid? voice-verified

What kind of idiot am I? voice-verified

That's what people hate. voice-verified

And it's what they hate having to admit. voice-verified

And they'll do almost anything to avoid having to stare that in the face rather than sweep it under the rug. voice-verified

Well, you see it all the time. voice-verified

Professional fund managers have been documented as being very reluctant to sell their losing assets. voice-verified

You see it in other areas where the markets have proved a thesis wrong, but people still can't let go of it. voice-verified

There's still plenty of bond investors who have still not accepted the fact that interest rates have been low for almost a decade and a half. voice-verified

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