Tuesday, June 07, 2005

Men are like Sheep

Herd Mentality

I recently came across a saying by Amit Whadhwaney, manager of the New York-based Third Avenue International Value Fund.

"To invest in something that's popular when it's popular is the kiss of death"

That certainly speaks volumes doesn't it. In fact, one doesn't have to think too far back to come up with a few good examples of investor herd-like madness, remember the Internet bubble of the late 90's? Or what about the mad rise of Thai banking stocks before the 1997-1998 Asian financial crisis caused the whole house-of-cards to come tumbling down?

You would think that investors would have learnt their lesson by now, but we know that's just wishful thinking. People don't learn, the morons.


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