reading listening to The Little Book of Behavioral Investing, by James Montier choc full with numerous tidbits of practical advice for even the most seasoned of investors.
Here’s what he says in regard to investment research:
We should do our investment research when we are in a cold, rational state, and when nothing much is happening in the markets. And then pre-commit to following our own analysis and prepared action steps.James Montier
By pre-commit, Montier is referring to what John Templeton used to do to remain faithful to his own investment research; by placing buy orders with his broker from a pre-determined list of stocks researched during a bull market.
I must admit that takes guts, especially when the market is selling off and everyone is heading for the exits.
Placing buy orders would take a lot of the sting out of the emotional turmoil involved in such a cold-blooded approach.
But if we are to learn from past masters and emulate their genius then there really is no choice.
Pre-commit, or succumb to the emotionality of the markets.