At best, I can only hope that there is a future turnaround for my company. Even though I bought it for all the wrong reasons, I still trust that I originally felt something good about this company!

My latest mantra, as a BUYandHOLDer, has become, "We shall see, we shall see." I can only hang onto my belief that this company will get-it-together and prosper. We shall see.

Our next "avoidable mistake" and warning issued by Mr. Carlson?

"The Herd Mentality."

He notes that "conformity is a strong human emotion. We usually feel comfortable in a crowd of similar people." And indeed, the research on this phenomenon validates what Mr. Carlson is telling us.

I pulled out an old college textbook, "Psychology-The Science of Behavior" by Neil R. Carlson (I wonder if there's any relation to our Charles B. Carlson?) where the "imitation" phenomenon is discussed. "Probably the most powerful social influence on our behavior and attitudes is the behavior of other people. If we see people act in a particular way, we tend to act in that way, too."

And don't you just hate this?! We all would like to believe that we make decisions under our own volition without anyone or anything affecting that decision…and yet, the research is clear. The behavior of others has a very strong pull on the decisions we make about our own choices.

This pull can be beneficial or deadly.

Natural disasters bring out the empathetic and caring side of most people. Just watch any community pull together after a hurricane, flood, or earthquake. Imitation leads to miraculous and unbelievable actions by individual people, caught up in this "helping others" pull.

And the deadly side of imitation? Many a peaceful gathering has turned into a riot due to the social influence of others. Individuals who would never destroy or harm property or another human being often find themselves caught up in the "mob mentality." Individually we would never do these things, but placed around others, we may lose ourselves and become part of the whole.

So how is this thinking "deadly" for investors?

Mr. Carlson also notes that "The herd mentality has an extremely strong pull on Wall Street. If large numbers of investors say a particular stock is a good one, then everyone can't be wrong." He warns us that this type of thinking leads to "lazy investment decision making."

I believe that for us do-it-yourselfers, we have to be particularly alert to this form of thinking. It can be so easy to say, "Well sheesh. If that many people are buying stock in that company, it must be pretty good. I better get in on it before it's too late!"

And that may very well be true. It might be a dynamite company! But, buyers beware. We shouldn't invest our dollars in a company simply because everyone else is doing it. That's the lazy way to invest, as Mr. Carlson reminds us.

We need to invest in a company because we took the time to study it and found out for ourselves if it passes the test of being a profitable company now, as well as into the future.

Let's be aware of the "herd mentality" and understand that there are no easy or "lazy" ways to invest for us BUYandHOLDers. Spend that little additional time with your company and feel comfortable that it passed your litmus test.

Next time we'll take a look at "information cascades" as we continue to try to "avoid the avoidable."

Thank you for joining me,

Joyce