{"id":25141,"date":"2011-11-11T07:03:14","date_gmt":"2011-11-11T12:03:14","guid":{"rendered":"http:\/\/countingpips.com\/fx\/2011\/11\/11\/when-will-our-risk-aversion-wear-off\/"},"modified":"2011-11-11T07:03:14","modified_gmt":"2011-11-11T12:03:14","slug":"when-will-our-risk-aversion-wear-off","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/11\/11\/when-will-our-risk-aversion-wear-off\/","title":{"rendered":"When Will Our Risk Aversion Wear Off?"},"content":{"rendered":"

By The Sizemore Letter<\/a><\/p>\n

Charles Sizemore was interviewed in a recent article by Reuters’ Lou Carlozo:<\/p>\n

\n

Amid a burst housing bubble, worldwide jitters over government debt and the high-profile recklessness of some financial movers and shakers, markets in the U.S. and abroad have taken a beating…<\/p>\n

Risk today, in almost any form, is seen as the enemy by a growing number of investors.<\/p>\n

“It’s totally understandable, even if it’s not logical,” says Charles Sizemore, principal of Sizemore Capital Management in Dallas, Texas and editor of the Sizemore Investment Letter.<\/p>\n

He cites a landmark 1979 study<\/a> by psychologists Daniel Kahneman and Amos Tversky, who found that people dislike losses 2.5 times more than they like comparable gains.<\/p>\n

This may explain why many investors dwell more on the bad times than good — and why every MF Global brings a boatload of bad memories back to life.<\/p>\n

“Generals always\u00a0 fight the last war, and investors invest for the last market — and 2008 was devastating, maybe the worst since the Great Depression,” Sizemore says. Investors “who rode it out can’t bear to go there again. They’re timid to do anything…”<\/p>\n

Remember when former Federal Reserve Chairman Alan Greenspan coined “irrational exuberance”? ‘Twas 1996, and tech stocks were through the roof — and, simultaneously, perched on a precarious bubble.<\/p>\n

Fast forward to 2011, where browbeaten markets could use even a pauper’s ration of that exuberance. Emotions still dominate, but of a darker variety.<\/p>\n

Call it the age of “irrational anxiety.”<\/p>\n<\/blockquote>\n

To read the article in its entirely see “When will our risk aversion wear off?<\/a>“<\/p>\n","protected":false},"excerpt":{"rendered":"

By The Sizemore Letter Charles Sizemore was interviewed in a recent article by Reuters’ Lou Carlozo: Amid a burst housing bubble, worldwide jitters over government debt and the high-profile recklessness of some financial movers and shakers, markets in the U.S. and abroad have taken a beating… Risk today, in almost any form, is seen as … <\/p>\n

Continue reading “When Will Our Risk Aversion Wear Off?”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-25141","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/25141","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=25141"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/25141\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=25141"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=25141"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=25141"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}