Joining the queue
Ask people what they prefer from their ideal restaurant experience and they’ll probably say something like: no queues or crowds, gentle background music, friendly waiters, plenty of space, and so on.
But logically, most people either can’t or don’t seem to do this.
Instead we end up with a number of very popular restaurants crammed tight with long queues, brusque service, a rushed dining experience, and frequently excruciating background noise.
Some of us even actively seek out the busier venues on the very grounds that they’re in favour, and therefore ‘must be good’!
You’re not the user
Andrew Carnegie once said that the older he got the more he watched what people did rather than what they said.
Apply this to your property investment plans: while a lot of us say we like the idea of moving to acreage in regional areas to rear chickens, behaviourally this is the exception rather than the norm.
What most people are doing is different, with the bulk of demand centralising into smaller homes close to the centre of the largest employment hubs.
Margaret Mead further observed that what people say, what people do, and what people say they do are entirely different things.
Market cycles and panic buying/selling eventuate from these patterns of behaviour:
Individuals can’t keep track of what every investor is doing, but they can readily respond to what their neighbours are doing (price action).
Attentive investors in stock markets pay heed to cycles, and systematically aim to place bigger bets in markets that are cheap (the Kelly criterion), instead of picking up pennies in front of the steamroller as the market top approaches.
Kierkegaard said that the truth rests with the minority, because these people have formed an opinion rather than following the gang views of the majority.
But while many talk about being greedy when others are fearful, instead most have an instinctive home bias and comparatively few people actually act this way.
Market cycles and buying low/selling high are two of key principles we teach in our Next Level Wealth coaching program (see here for more).