Greed and fear are two opposing emotional forces that profoundly affect markets.
Greed drives prices to levels of over-valuation – and fear to levels of under-valuation.
Psychologists will tell you that fear is the more powerful of the two forces – which explains why Fear of Missing Out (FOMO) often leads to price bubbles.
Do you remember the “buy now or be priced out forever” battle-cry that was shouted from the mountain tops by the National Association of Realtors back in 2005-2006 – which happened to be right before housing prices collapsed?
How did that fear-driven message work out?
How to Get Rich:
Guidance from Warren Buffett
“If you want to be rich,” says Warren Buffett, he has a rule that takes advantage of those prevailing moods:
“Be fearful when others are greedy,
and be greedy when others are fearful.”
Warren Buffett claims he is not a market timer – but the above quote says otherwise.
You buy properties when they are undervalued and hold them until they are overvalued. Most people, however, act emotionally and do just the opposite – to their great detriment.
Buying low and selling high is the Golden Rule of investing. It’s the strategy that produces the best long-term results.
October 23, 2021 Seminar: