Investors often get caught up in short-term market fluctuations and noise. The Stockdale Paradox underscores the importance of maintaining faith in the long-term prospects of your investments. This perspective can help prevent knee-jerk reactions to market volatility. By confronting the brutal facts of the market, investors can avoid the trap of overconfidence and make more measured choices.
These choices include investing with a margin of safety, not succumbing to FOMO, and avoiding bad businesses that may be benefitting from short-term tailwinds.
https://2point2capital.com/blog/index.php/a2023/10/10/optimism-and-the-stockdale-paradox/
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