No One Can Know the Bottom

• With luck, you can know what will happen, but you can never know when.
• If the analysis you did when it was $9 was correct, you should buy when the stock falls to $8. Just because it fell to $8, you don't need to be swayed by the price.
• A price decline should not be taken as a sell signal. A price decline is like the item I should buy going on sale. How can a signal to buy become a sell signal?
• No matter how smart and rational you are, there is always the possibility of being wrong.
• Being only human myself, I was too scared when I started buying in October 2008. At that moment, no one could know what would happen, and it was impossible to determine whether the global financial system would collapse—especially when going through something unprecedented. There seemed to be no good news ahead for the future of the financial system. So why did I buy stocks? First, because they were so cheap that I would profit even if company values fell by a third; second, because if the financial market was going to end anyway, the money I had would be useless.

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Topics: Howard Marks
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