Timor and Cupiditas
Did the title make you click open? Yes? No? Maybe? Do let us know. We think we sparked your curiosity.
Anyways, are you wondering what those words mean?
Here is a clue: it has to do with emotions.
Timor is the latin word for fear and Cupiditas is the latin word for greed, lust, or passion depending on the circumstance.
So why have we kicked off with emotions?
Human beings like to think they make decisions purely on a rational basis.
For instance, it makes sense to take the umbrella closest to your door on your way out. It’s small and fits into your bag but then you decided to go with the umbrella in your room, even though you are running late?
You may be unwilling to admit it, but you did that just because you liked its colour and the feel of its handle. It is okay, a bit of vanity is allowed.
This goes to show the role emotions play in decision making; sometimes out weighing logic.
When it comes to investing, emotions also play a big role. Two emotions: Fear and Greed.
At times like this, fear is a common emotion. People are facing the prospects of salary cuts and job losses.
They would be open to any opportunity to make money. Better to jump on it, rather than do nothing, right?
The Fear of Missing Out — FOMO as it is known, then leads to them not conducting due diligence.
What kind of investment gives 300% in one month and you invest in it? Some even go on and invest all they have.
You know how the story ends? Losses!
At times like this, one or both of those emotions will jump when an opportunity comes up.
Don’t let FOMO lead you to making wrong decisions. Calculated risk is okay but spending the money for your house rent or school fees on something else is not calculated risk. That is decision making based on greed.
There were opportunities yesterday and there will be opportunities tomorrow.
Use your now wisely. There are black swan events that are profitable, but saving and investing consistently is how the bulk of wealth is made.