STREET DOGS

From What Investors Really Want by Meir Statman. “We are intelligent, neither irrational nor insane. We are ‘normal smart’ at times and ‘normal stupid’ at other times. We do our best to increase the ratio of smart behaviour to stupid behaviour, but we do not have computers for brains and we want benefits computers cannot comprehend.

“We want high returns from our investments, but we want much more.

“We want to nurture hope for riches and banish fear of poverty. We want to be number 1 and beat the market.

“We want to feel pride when our investments bring gains and avoid regret that comes with losses. We want the status and esteem of hedge funds, the warm glow and virtue of socially responsible funds, and the patriotism of investing in our own country.

“We want good advice from financial advisers, magazines, and the internet. We want financial markets to be fair but search for an edge that would let us win.

“We want to leave a legacy for our children when we are gone. And we want to leave nothing for the taxman.

“The sum of our wants and behaviours make financial markets go up or down as we herd together or go our separate ways, sometimes inflating bubbles and other times popping them.

“Investments express parts of our identity, whether that of a trader, a gold accumulator or a fan of hedge funds. Investments are a game to many of us.

“We may not admit it we may not even know it, but our actions show that we are willing to pay money to play the game … in trading commissions, fees and software that promises to tell us where the stock market is headed. And investments are about what we would do with the money we make and how it makes us feel.”