Risk Psychology

****** JUST to be CLEAR ******

If you read what I'm writing, it's my own opinion, written here for my own purposes.

what you do with it is your business

I follow MicroVision because I have money at risk in the stock. I'm risking money in the stock because I think the company has particular technologies that will be in enormous demand and help a lot of people in a lot of ways. That's an opportunity for significant profit. 

(And I'm still at risk, because I'm quite sure that the risk will pay off.)

When the stock has bad weeks like we've had recently, I try to separate all the emotional things that accompany risk from the fundamental story. I work very hard to be objective -- which is often challenging. 

So recently I was reading this book about decisions called "The Paradox of Choice" 

Some paragraphs in there seemed to be perfect something to pay attention to when watching this stock -- particularly the behavior of those who are shorting MVIS.

"It seems to be a fairly general principle that when making choices among alternatives that involve a certain amount of risk or uncertainty, we prefer a small, sure gain to a larger, uncertain one. Most of us will choose a sure $100 over a coin flip (a fifty-fifty chance) that determines whether we win $200 or nothing. When possibilities involve losses, however, we will risk a large loss to avoid a smaller one. For example, we will choose a coin flip that determines whether we lose $200, or nothing over a sure loss of $100."

- - - Paradox of Choice, Page 65.

I think this is describing the behavior of those shorting the stock fairly well. If they can start a stampede out of the stock, they can cover their losing shorts. They are willing to risk a lot to create their escape. If they fail they lose it all.

It's been reported to me by a reliable source that one brokerage is offering 40% to borrow shares of MicroVision. Willingness to pay this insane amount to short a stock smacks of desperation - not a rational financial decision -- a risk of $200 to avoid losing what's already been lost.