“..approval is not the goal of
investing. In fact, approval is often counter-productive because it sedates the
brain and makes it less receptive to new facts or re-examination of conclusions
formed earlier. Beware of investment activity that produces applause: the great
moves (when made) are usually greeted by yawns.”

-       Warren
Buffett, p.16 of 2008 Berkshire Hathaway annual report.

“Individuals who cannot master
their emotions are ill-suited to profit from the investment process.”

-       Benjamin
Graham, the ‘father’ of Value Investing.

Consider
the following, real life, example of comparative returns (for which I am
indebted to Kokkie Kooyman of Sanlam Investment Management). Imagine you
invested $10,000 into shares of Warren Buffett’s now legendary holding company,
Berkshire Hathaway, at the end of 1971. Then imagine you (or better still, a
sibling, or friend) invested $10,000 into the S&P 500 Index. The table
below shows how your investments fared.

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