Bull markets are born on pessimism, grown on scepticism, mature on optimism and die on euphoria. - John Templeton
"[You] have to go against mass opinion and buy toward the end of the exaggeration phase of the bear market and at the beginning of the adaptation phase of the bull market. [You] should then follow mass opinion and hold [your] securities through most of the bull market. Toward the end of its exaggeration phase [you] should again go against mass opinion and sell. Thus it is as wrong always to oppose the prevailing tendency as it is always to follow it. In a nutshell, the. right rule is: first against the tendency, then with it, and finally against it."
When do you admit that you’re wrong, start all over again. Or when do you hang on and assume that the markets will turn around in your way. That’s the biggest decision we all have to make. However, there is one thing that is clear. Over the last several hundred years we’ve been able to identify some people that can do it better than others. They don’t necessarily go to MIT, they don’t necessarily have degrees in mathematics so that doesn’t automatically rule them out. They are the kind of people that can make that judgement that says something’s different here, I’m going back to harbour until I figure it out. Those are the kind of people you want running your money.
A severe decline in the general market will affect all stock prices adversely, and the less active issues may prove especially vulnerable to the effects of necessitous selling.
Stock-market timing cannot be done, with general success, unless the time to buy is related to an attractive price level, as measured by analytical standards.
“Eventually, you will have to be right on fundamentals to be rewarded”
If you buy stocks when they are out of favor and unloved, and sell them into strength when other investors recognize their merits, you’ll often go home with handsome gains.
The different systems - Ben Graham, growth stocks - are fine, as long as you have the discipline to stick to them...Myself, I have no system. I'm a pragmatist. I just wait until the fourth year, when the business cycle bottoms, and buy whatever is offered.
"We have been led to the old principle that the investor should wait for periods of depressed business and market levels to buy representative common stocks, since he is unlikely to be able to acquire them at other times except at prices that the future may cause him to regret."
“Buy when everyone else is selling and hold when everyone else is buying. This is not merely a catchy slogan. It is the very essence of successful investments.”
J. Paul Getty
“For as long as I can remember, veteran businessmen and investors – I among them – have been warning about the dangers of irrational stock speculation and hammering away at the theme that stock certificates are deeds of ownership and not betting slips… The professional investor has no choice but to sit by quietly while the mob has its day, until the enthusiasm or panic of the speculators and non-professionals has been spent. He is not impatient, nor is he even in a very great hurry, for he is an investor, not a gambler or a speculator. The seeds of any bust are inherent in any boom that outstrips the pace of whatever solid factors gave it its impetus in the first place. There are no safeguards that can protect the emotional investor from himself.”J.Paul Getty
We have no problem buying things that take a long time to play out. Call me lazy, but I don't want to worry about last week's same-store sales or next week's oil price.
The most important change in my 40 years of investing has probably been in investors’ time horizons. Today the majority of investors – Ben Graham would call them speculators – are focused so closely on this week, this month and this quarter. Stocks are bought and sold on penny deviations from short-term estimates, which is mind-boggling. Crazy as it is, we can’t complain – it just creates more opportunities for investors with longer time horizons.
