The Herd are *awake*Its much better to profit from folly than...

The Herd are *awake*

Its much better to profit from folly than participate in it.
What does this mean, and how can we best do this?

Well, it all depends on time horizon and how much intensity we want to bring to the table. Picking winners is more than picking the correct time on which to enter a business. Understanding the business (its comparative advantage),its management and its long term prospects (financial, products or services) coupled with an attractive price are all *musts*.

Since Sept 08, we have seen prices drop, some warranted & some not on human emotion (panic). But we do not make investments for a long period of time based on a few lousy years, and particularly not on the movement of the price of a security. Nor do we give in on businesses that are supported by strong fundamentals.
Now, its debatable on what those *businesses* are, however, the framework & principles are there and have not changed. Not once. And certainly not during the darkest of dark nights.


Those of us choosing the low cost option - index funds/LICs, its imperative we choose those charged with governance of overseeing the funds and the integrity they hold. (Think, AUI, CHO, MLT, ARG - all outstanding). Secondly, look at the cost to run the funds. I read with amazement today that a fund, which is well known is reducing its fees from 2% to 1.5% for management & then 20% to 18% for performance. An 18.5% loss for the year was made, so on top of that, you pay them 2% of YOUR money for having them made THAT LOSS!
Wonders never cease - and all at a time when we have just been through a panic never seen before it most of our life times.


What we can conclude, when investors **flock** to such investments - the ball has started to move again.
The Herd are awake....