The efficient market hypothesis is nonsense. Markets are driven by humans, humans are irrational, thus markets are irrational. Occasionally, something happens and investors panic. You should take advantage of these instances, not join the stampede (or, if you are going to rush for the exit, be the first.) Think of a 20 per cent fall in a share price as you would a 20 per cent sale at a department store, an opportunity to buy cheap.
Hugh Young is managing director at Aberdeen Asset Management Asia.