Don’t be just one of the crowd

One of the most shocking things about sharemarket corrections is that so few people see them coming.

Even highly trained and experienced experts among the funds managers, financial advisers and sharebrokers are taken by surprise (which negates their usefulness somewhat).

I have always maintained that the secret to sharemarket success is to think and act differently from the majority of investors, including the so-called experts.

This conclusion has been reinforced in research by Professor Robert J Shiller of Yale University. In a paper entitled Bubbles, human judgment and expert opinion, he notes that collective myopia about the potential downside of a bubble reflects human shortcomings.

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