Consensus is the worst phenomenon…

Consensus in literary terms means a general agreement.  In the modern market phenomenon. A general agreement as to what will happen if some event triggers up or what will it lead to if something do not turns out to be great is all what people do all the time. There is always a hype on the market performance when something big happens in the country. It is a tendency to do something blindly when others are doing the same. It is counting on the advice of someone without thinking and without knowing the real reason.

This leads to a false trend in the market where everyone seem to follow the other one. If the herd is saying to quit the market, many quit and in turn take the wrong decision. The same happened in 2008 when the markets collapsed. Because of the collapse, many so called experts tended to project their opinions about how market will not perform in the coming time and in turn advised to quit at a lower valuation which led to loss to many retail investors because they just listened to the consensus about the market performance. And thus, they quit suffering losses. But at that time, it was not prudent enough. During the times of downfall, it is fundamental to either hold on to market or to purchase in the market, but the consensus at that time was built of quitting the scene and thus, people had a bad experience of the market.

The same situation is quoted by the great investor in the following quote:

“ Be fearful when others are greedy and be greedy when others are fearful.”

So just close the doors and make sure to never listen to the herd and instead learn to guide the herd. And when you plan to guide, all you need is just to understand that you need to work fundamentally, be stable, and be consistent in your efforts in investing. And make sure that never to hear the consensus but to build your own strategy on the basis of fundamentals of equity investment, which is nothing more than being patient.