Opinions are very different from judgements. Investment is a field where we carry both and apply them constantly. Opinions are lighter, presumptive, and easy going. We can like or dislike a personality, a business leader, an industry, or a business. Opinions formed on the basis of instinct rather than inquiry tend to often change and we use our freedom to express them as they keep changing. But, judgements are usually arrived at with more appraisal, inquiry, and analysis. These are formed with a proper formal process and constantly reviewed at desired intervals.

Stock markets tend to mix up its opinions and judgements. This could lead to grave investment errors. The error is usually made by the person receiving it, rather than by the ones making it. So, one should carefully judge what we are receiving and make a clear cut between an opinion and a judgement. It is up to us to use opinions in forming our own investment judgements. But, we should avoid the mistake of simply taking opinions as judgement.

When markets are trading at high valuations this tendency rises to dominate our behaviour. We need to ensure we clearly differentiate the two. Ensuring that we sift through opinions carefully and form our own informed judgements is the need of the hour.

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