Tip of the day: We Pick Stocks Like We Pick Animals

Chartporn.org reminds us that it's better not to pick what we think is best when picking stocks, but rather, what everyone will think is best.

In 1936, Keynes thought of it like this: In the market, it doesn’t make sense to invest in the company you think is best. It makes sense to invest in the company that you think other people will think is best. Because if everyone else invests in a company, the price of its stock will rise.

As an example of this principle, take a look at the graphic below.



Food for thought.