What matters much more than high-frequency trading to the average investor is what we’ll call high-frequency follies, which are the primary emphasis of this letter. For example, according to a recent Wells Fargo survey of more than 500 affluent investors (defined as having $500,000+ in investible assets), in reaction to the 2007–09 bear market, 21% of these investors have written off investing in stocks—for now, at least. Interestingly, of this 21%, more than a third would reconsider investing in stocks after they produce sustained positive returns. Say what? These investors are willing to invest in stocks only if prices first move considerably higher? Although this illustrates human nature, waiting until after stock prices have risen to the point that everyday investors feel more confident (rather than yesterday or today) is not a strategy that’s likely to produce good returns. Simply put, we’d call this approach a frequent folly.