Group Investing: Following the Crowd
Group investing is one of the quickest ways to lose money in the stock market. Following a group of investors chasing a stock is never a good idea. Once you realize a stock is rising quickly you are probably already to late.
Unfortunately, you will find many investors who choose to believe in momentum investing. They hear a news story or see a stock rising quickly, and feel the need to jump in and follow the crowd. While some investors who follow the crowd may have some short success, more times than not they will end up losing.
Many contrarian investors have had great success off of investors who chose to follow the crowd. Discovering stocks on your own before everyone else does is the best way to make money in the stock market. You want to be on the ship before it leaves the dock instead of trying to swim out to meet it.