There is an earlier post on “why people lose money in equities” so I called this post “why….” continued that is all. Many readers, blog writers, editors, like this title. Also many people who lose money in equities think they are unique. Here is a clarification. In all my experience, I can easily tabulate the pattern because of which people lose money in equities. Here are some more reasons…

1. Overconfidence: I sold some high p/e stocks and bought BASF. I always believed that BASF was a good stock and at a p/e of 10 I found it inexpensive. Then BASF announced some buy back at a price of 275. This was pure, damn luck. Now if I think there is some pattern in my buying / selling I would be fooling myself. I worked on the logic that in a slower economy, higher p/e stocks would not do as well as lower p/e stocks.

2. Too much of activity: In my place of work, there are many kids who dabble in stocks. Last week I asked all of them to see how much is their profit vs. how much is their brokerage. Some of them have wisened up.

more will follow………….