Real Estate Investor Magazine South Africa April 2016 | Page 41

Looking back at behaviour like this, it is easy to
see one’s disastrous decisions – and it seems so foolish
and irrational to have made them in hindsight. The
reason for this is that when you look back at these
past events, you are able to analyse them rationally
and objectively. And all seems clear.
But you are not emotionally involved in that
moment – and that is the problem.
In financial markets especially, we all tend to make
decisions emotionally – and then rationalize them
with logic thereafter.
As can be seen from history, your emotions will
cause you to make exactly the wrong decisions at
market peaks and at market bottoms.
And so, when we got to the latter half of 2015, and
the market was panicking, what was default reaction?
A fearful, emotionally-charged lemming-like rush
for the door – just as the majority did back in 2008
and 2001.
In other words, don’t do what everyone tends to
do at market extremes. And similarly, don’t do what
your own emotions are screaming at you to do.
In fact, do just the opposite! That is why having an
objective view of where the market is likely to head
is essential at such a time, enabling you to make a
rational, educated, objective decisions. That is, if you
keep the enemy – your emotions – locked out of the
process.
www.reimag.co.za

So, where to from here?
Contrary to all mainstream expectations (but in line
with our forecasts), the Rand has already strengthened
15.5% at the time of writing – a real surprise to the
majority who expected over R20 by this time.
And further Rand strengthening is expected in the
months ahead based on our Elliott Wave patternmatching analysis.
And when the strengthening cycle is mature and
the Rand is ready to start weakening again, we will
know for sure we are at that point when the majority
have decided the Rand is finally onto a good thing
… a certain one-way bet … and this time is different
from before.
And in their infinite wisdom they convert their hard
currency holdings back to Rand.
Yes, it is indeed difficult for us irrationally predictable
human beings to learn from the past.
But it is not impossible.

RESOURCES
Dynamic Outcomes
APRIL 2016 SA Real Estate Investor

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