Hope and Fear

"I sometimes think that speculation must

be an unnatural sort of business, because I find that the

average speculator has arrayed against him his own nature. The

weaknesses that all men are prone to are fatal to success in

speculation -- usually those very weaknesses that make him

likable to his fellows or that he himself particularly guards

against in those other ventures of his where they are not nearly

so dangerous as when he is trading in stocks or commodities.

The speculator's chief enemies are always boring from

within.

It is inseparable from human nature to hope and to fear.

In speculation when the market goes against you -- you hope that

every day will be the last day and you lose more than you should

had you not listened to hope -- to the same ally that is so

potent a success-bringer to empire builders and pioneers, big

and little. And when the market goes your way you become fearful

that the next day will take away your profit, and you get out

too soon. Fear keeps you from making as much money as you ought

to. The successful trader has to fight these two deep-seated

instincts. He has to reverse what you might call his natural

impulses. Instead of hoping he must fear; instead of fearing he

must hope. He must fear that his loss may develop into a much

bigger loss, and hope that his profit may become a big profit.

It is absolutely wrong to gamble in stocks the way the average

man does."

-Reminiscences 

What is written above is a very very simple concept that is very very difficult to follow.  It is almost becoming second nature to me in at least being able to observe this natural tendency.  I still find it hard to add to winners, but that is what makes me money.  What is so hard about that?