Just a short article today spurred on by recent conversations.

I often have someone ask me what I think of a certain stock or certain industry because of people’s future optimism.

Common examples are the healthcare industry. People think this will be a big industry in the future due to an ageing population and people living longer. This is true.

Same for the retirement village stocks.

Others see very bright futures for electric vehicles.

There’s no denying that these trends will most likely play out. But that is why you are not on to a secret winner that no one else knows about.

You are not some kind of genius that knows something that millions of other investors don’t. No offence.

Everyone else is already thinking along the same lines as you.

Stock prices are based on future predictions, so today’s stock price is already pricing in the collective future expected earnings.

Sure, returns can still exceed expectations, but it’s difficult to know that ahead of time.

Your predictions are likely shared by thousands, if not millions. Thinking you are a special investor can lead to risky investing practices.

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