Tuesday, 19 March 2013

Today's Words of Investing Wisdom: Find out the Facts

Investors overreact to the latest news, which has always been the case, but I think it's especially true today with the Internet. Information spreads so quickly that decisions get made without particularly deep knowledge about the companies involved. People also overemphasize dramatic events, often without checking the facts. It's the classic, “Are more people killed each year by sharks or by being trampled by pigs?” type of situation – the dramatic event can get more play than it deserves. These types of overreactions are what we're trying to take advantage of.

                                                John Dorfman, 31 October 2008 (through Valueinvestorinsight.com)

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