Both--my intial foray into the markets in the early 80's was a 40 percent loss of total liquid net worth.
since they don't wear id tag 'Hello, I am the fool', how can you track them before they commit their foolish act.
The hope would be that by mentioning the group, that some would be able to recognize their possible entry into the group and stop it accordingly.
Longs are only foolish when they keep pressing upside into a downtrend. Right now, longs are printing money hand over fist. They will continue to do so until this crystal-clear uptrend ceases to persist. At this moment in time, replace the word "longs" with "shorts" in OP and it 100% describes what is taking place right now
I was listening to the financial news last night and the comment was made that the reason forthe latest surge was a lot of SHORT COVERING. While this may or maynot be true, it certainly seems that the more the shorts try to hold against the (obvious) and dominant trend ("and pick the top") the more thay are going to be gored. Looks like they thought the 1375-1380 range was the top ... and it looks like they were wrong. JJ BTW, I find it hard to the believe that 30% have never been a foolish long or short ...
I believe that I did post the word "short" in the original post austin. Thanks for pointing it out though. It is exactly what is happening(has happened) to some during this run up.
I believe that many more than 50% are foolish longs. I myself have been one before. I suspect that numerous folks have gone through at least some of the characteristics of the foolish long.
I would like to mention a group of traders. These are the foolish longs. Let me explain what a foolish long (or short) is. This is the trader that is overextended and has held on without using a tight stop initially. (overextended and highly leveraged traders must use stops). Most retail /public traders are overextended and highly leveraged. He has already gone well past his 2 percent of portfolio stop guideline and is now looking at his summer vacation money, his kids college money and/or the next mortgage payment etc slipping away from him( or may have to tell the wife). He then sells his position and gets out just near the bottom. He has feared that he is in front of a freight train and the next move down will destroy him(or his wife will). Of course, he has been in front of a freight train all the time and because of the overextension, he has put himself in this position. He must get out. These foolish longs sell (humans are built the same, there are other foolish longs selling near the same time that he is), and when they sell, it creates the final downward thrust as the divergence traders eyeing the chart are preparing to buy in. Then the foolish longs watch the price retrace upwards as they watch their fresh short positions getting whacked and they hold on to those. And the cycle goes on and on. Note: Nowhere in this discussion do I mention anything to do with fundamentals.
B1 Unfortunately I must disagree (respectfully of course) Your post reeks of the FUNDAMENTAL human condition each of us must overcome jmho RN