🐑Intermediate
Herd Mentality
Why 'everyone is buying' is dangerous
When everyone piles into a stock, price often detaches from fundamentals. The dot-com bubble and 2021 meme stocks are examples. Warren Buffett's rule: 'Be fearful when others are greedy, greedy when others are fearful.' If a stock is on the front page of every news outlet, most of the upside may already be priced in.
Quick check
What does Buffett mean by 'be fearful when others are greedy'?