Psychology is probably the most important factor in the market - and one that is least understood.

I paraphrase Lord Rothschild: ‘The time to buy is when there's blood on the streets.'

Demanding immediate success invariably leads to playing the fads or fashions currently performing well rather than investing on a solid basis. A course of investment, once charted, should be given time to work out. Patience is a crucial but rare investment commodity.

Favored stocks underperform the market, while out-of-favor companies outperform the market, but the reappraisal often happens slowly, even glacially.

History constantly reminds us that in an uncertain world there is no visibility of prospects. Future earnings cannot be predicted with accuracy.

We invest in undervalued companies that exhibit strong fundamentals, above-market dividend yields and historic earnings growth, which our analysis indicates will persist. Our strategy is to own strong, fundamentally sound companies and to avoid speculative stocks or potential bankruptcies.

Psychology is probably the most important factor in the market - and one that is least understood.