Wednesday, November 26, 2008

The Herd Mentality

I just watched a great video on youtube outlining the market predictions made by Peter Schiff over the last two years. You can watch it here:

In this video Peter consistently makes great predictions about the future of the economy while analyst after analyst tells everybody that everything is great and will only get better. My favourite part is when another guest is so confident that they goes so far as to try and bet Peter on the future results. Another great moment was the great Ben Stein's top pick of Merrill Lynch. Wonder how that stock pick worked out?

The point of this is that most investors & analysts just go with the flow and have very little insight on anything more than the very near term. If everybody is saying that everything is great, then it must be great. Right? The solution is to invest for the long term and to not get caught up in short term hype or BS being pitched by tv analysts.