The herd mentality drives the stock market.
When the market goes up, people arrive at the market in droves buying frantically as prices escalate. In the end most end up buying high.
When the market is way down (like now), most investors would stay on the side line, thinking that the market will tank further. Most are afraid and there isn't lots of others to follow. Most then miss the chance to buy low.
The logic of buy low, sell high seems to be hard to execute but theoretically easy to understand.
Warren Buffet in his books has often advice that a great company is worth the buy when it is cheap. His experience has been one where most will stay out of the market, he goes out hunting for value.
Here is an interesting article from the Investor Edge newsletter is giving the same advice...
Maybe this time, I will stay away from the herd mentality?
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