Greed, prudence and lessons from history

In the realm of investments, a pattern reminiscent of Peter Lynch's famous cocktail party theory seems to be unfolding. Peter Lynch had this theory of predicting market movements by attending dinner parties. People paid little attention to him when the stock market was sluggish or range-bound. But when it picked up, people would ask about stock picks and the right investment timing. Even people like dentists would offer stock suggestions to the seasoned fund manager. Today, we witness unprecedented enthusiasm and optimism in the market, particularly regarding certain market caps. Some of the inquiries I have been getting from some of my investors are: "Why don't we create an exclusive small-cap portfolio?" "Why have we initiated a systematic transfer? Can't we invest all at once?" "Considering 'China + 1' and the formalisation of the economy favour small-cap companies, can we allocate more of our investments in sectors such as defence and manufacturing?" "I wish to build a portfolio solely comprising sector-specific funds and time it per

This article was originally published on December 11, 2023.