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Avoid following the crowd in investing decisions from "summary" of The Intelligent Investor, Rev. Ed by Benjamin Graham
The intelligent investor must realize that the stock market is not a game for amateurs. It is not a place to follow trends or act on emotions. Instead, it is a place for careful analysis and rational decision-making. Following the crowd in investing decisions can lead to disastrous consequences. When everyone is buying a particular stock, it is often overvalued, and the intelligent investor knows to stay away. Conversely, when everyone is selling a stock, it may be undervalued, presenting a buying opportunity. The key is to think independently and not be swayed by the emotions of the market. This requires discipline and a long-term perspective. The intelligent investor does not get caught up in the daily fluctuations of the market but instead focuses on the underlying value of a company. By avoiding following the crowd, the intelligent investor can take advantage of opportunities that others may overlook. This contrarian approach is not always easy, as it goes against human nature to go against the crowd. However, it is a necessary mindset for successful investing. In the words of Benjamin Graham, "The investor's chief problem - and even his worst enemy - is likely to be himself." This reminder underscores the importance of discipline and rationality in investing decisions. It is this mindset that sets the intelligent investor apart from the rest.
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