Saying “I’ll be greedy when others are fearful” is much easier than actually doing it.
The Very famous and commonly used by Warren Buffet:
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”
It is evident that by the above saying that buffet did not buy any single stock of technology company in tech era bubble of 1990-2000. Tech Companies stock were just rocketing like 10X,20X,40X in short span of time without fundamentals supporting them.He saw the fundamentals and fundamentals were worst ,these technolgy and dot com companies were Burning cash and loosing money. Some fund Managers started to predict that investing with buffet would not create wealth and instead the will be leftover in these rally. But in 2000-2001 Dotcom bubble broke and when the dust settled buffet investments were beating higher returns then any funds in US and many funds just lost 80-99% Wealth. He underperformed for almost decade but after 2000 he was the winner where everyone lost 90% He gained more then 30-50% in subsequent years .
Markets go through at least one big pullback every year, and one massive one every decade. Get used to it. It’s just what they do.
Pullback here means downfall, pull down from peak prices.
History is true
High: Feb 1986 Sensex@656
Pullback:March 1988 Sensex@390
New Record High :October 1990 Sensex@ 1400+
High: April 1992 Sensex @ 4467
Pullback: May 1993 Sensex @ 2100.87
New Recor High: Feb 2000 Sensex @ 5876
High: January 2008 Sensex @ 20873
EXCEPTIONAL Massive Pullback: March 2009 Sensex @ 8160
High: January 2015 Sensex @ 29278
Pullback: Feb 2016 Sensex @23086
The point is nobody knows what could be the new high or what could be the new low we should be used to it and be prepared for the worst and always remember there is no one way movement of price.
Understand This Chart
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