There was a man who bought a flat to rent for R100 000. The purpose was for rental income to help him out at retirement in years to come. The next month there was a similar flat in the same complex selling for R85 000. He decided not to buy it, even though he had the money and would get the same rent. Three months later they were selling for R110 000. So he bought another one. Got the same rent. Four months later they were selling for R125 000, so he rushed off to buy another. Got the same rent. A further two months later, one was selling for R91 000, but he didn’t buy this one. He preferred buying them when they were more expensive than his last purchase.
This analogy to investing popped into my head this past week, while pondering investor behavior and how many investors deal with value, wishing for it to go up before investing.