We humans are emotional creatures.

We like to think we’re rational…but we’re not.

If we were, stock markets probably wouldn’t boom and then bust. At least, not nearly as wildly.

Thing is…stocks are bought and sold by us humans. And so our emotions are reflected in prices.

Even if you accept that objective fact, it doesn’t change anything.

This fact also explains why investors tend to hold on to their losers a lot longer than they do their winners.

That doesn’t sound like it makes sense.

Any rational person would say they would cut a loser and hold a winner.

On paper, that makes perfect sense.

But, as Greg has written an entire book on (You, Your Brain, and the Stock Market available to all subscribers of Greg Canavan’s Investment Advisory), our human brains are emotional…and rarely sticks to what is perfectly logical.

We’re not walking, talking spreadsheets that can weigh all the evidence piece by piece, consider all possible risks and rewards, and do a cost-benefit analysis down to the last decimal point.

We’re human beings, each with unique experiences and emotions.

I’ve showed this graph before, but I’ll bring it up again…