Throughout my years in the stock market, the most devastating thing that ruins investors is not a recession. It is ego – masquerading as superiority because you believe you possess “insider information” nobody else has. The phrase “He said…” has caused far more financial ruin than blind trading ever could.
It is an alluring trap. It makes you feel special, like you are ahead of the game – until you go blind and deaf to every warning sign the market throws at you. When someone whispers about a hot stock, an upcoming merger, or an unannounced billion-dollar project, your brain immediately fires: “I am the chosen one. Everyone else is just dumb money waiting to buy my bags.”
This is the genesis of being Ego Blind, blinded by your own hubris.
Once you anchor your beliefs to insider rumors, you shut out every red flag. Technical charts could be screaming a nosedive. You do not care. Fundamentals could shift drastically – you remain unfazed. Your ego whispers, “My intel is a sure thing. Anyone who disagrees just does not get it.”
And when the price starts to plummet, contradicting the very rumors you were fed, your ego urges you to hold on rather than reassess. You desperately want to prove your informant was right. Ultimately, you become the last one standing at the peak. Pride intact, capital gone.
I have watched heavy-hitting investors push all their chips into a manipulated stock solely because they trusted a friend on the board. When the price tumbled from its high, they still refused to sell. Their ego dictated, “If I sell now, I am admitting I was duped.” Let me be clear. The market spares no one just because you are friends with the board. On the trading floor, we have a saying: “Any insider news that reaches your ears is exactly what they want you to hear – so they can use you as exit liquidity.”
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