Weak Markets

Weak Markets

“A down market lets you buy more shares in great companies at favourable prices. If you know what your doing, you’ll make most of your money from these periods. You just won’t realise it to much later” Shelby Davis

“The times when you make the most money is when things really look awful.   No one has a rational answer as to how we’ll get out of the problems.   If you know a company well and have a history of owning it or studied it carefully, you’ll see it at a price which is just a crazy price.  You couldn’t buy at that price before”  Glenn Greenberg

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After A Tough Year, Odey Asset Management Finishes 2021 On A High

For much of the past decade, Crispin Odey has been waiting for inflation to rear its ugly head. The fund manager has been positioned to take advantage of rising prices in his flagship hedge fund, the Odey European Fund, and has been trying to warn his investors about the risks of inflation through his annual Read More

Weak Markets

“Real investors should never feel bearish because the time to buy value is when markets go down!” Thomas Kahn


“We see the latest correction not as a disaster, but as an opportunity to acquire more shares at low prices. This is how great fortunes are made over time.” Peter Lynch

"Bear markets are great times to load up on stocks"  Ralph Wanger

"Quickly forgotten during times of distress, yet no less important to remember, is that lower prices are an ally to long-term returns" Allan Mecham

"I am a bear market buyer; I like to sell into market strength" Peter Cundill

"Since day one, I emphasized how inevitable stock market corrections are. I even wrote many times that they were “partners” in our quest for superior returns. So, we should not fear them but acknowledge right from the start that we will live through many corrections over the years. We should even try to benefit from them as much as we can."  Francois Rochon

“You need to have bad markets to set the stage for the 40% annual increases. If we had good markets forever, I’d be dead” Peter Cundill

"Down cycles are not fun. But they form the basis for enormous future profitability.” Steve Schwarzman

Difficult markets help us succeed as investors. While claiming no predicitive ability to recognize or time the next recession, we are not afraid of periods of slow business and weaker markets. Only in adverse environments do owner-orientated companies with proven track records and strong balance sheets sell at bargain prices. Tough times allow the prepared to attractively deploy capital, setting the stage for future growth” Bruce Berkowitz

“In recent weeks, investors have relearned a basic truth about markets – prices go down as well as up. While emotionally taxing, down markets give us what we need to earn above average returns – low prices for excellent businesses” Bruce Berkowitz

"Most investors take comfort from calm, steadily rising markets: roiling markets can drive investor panic.  But these conventional reactions are inverted.  When all feels calm and prices surge, the markets may feel safe; but, in fact, they are dangerous because few investors are focussing on risk.  When one feels in the pit of one's stomach the fear that accompanies plunging market prices, risk-taking becomes considerably less risky, because risk is often priced into an asset's lower valuation" Seth Klarman

“Stocks don’t read the paper or swoon in response to scary headlines. When they’re priced for desperation they can rally in the face of desperation” The Davis Dynasty

“A stock market decline is as routine as a January blizzard in Colorado. If you’re prepared, it can’t hurt you. A decline is a great opportunity to pick up the bargains left behind by investors who are fleeing the storm in panic” Peter Lynch

"For those properly prepared in advance, a bear market in stocks is not a calamity but an opportunity" Sir John Templeton

“Investors have no reason to feel bearish. True value investors are glad the markets are down.” Irving Kahn

“We have this saying: The worst things get, the better they get. When things are bad, they go up.” David Tepper

"I'm very bullish when the market drops perceptibly because I feel it has already discounted any troubles we are going to have"  Roy Neuberger

“Invest in time of chaos, harvest in times of prosperity” Jonathon Sokoloff

“The best bargains are always found in frightening environments” Howard Marks

Declining stock prices can ultimately cause people to panic and sell. But the moment they join the panic and sell stock, they also relieve the cause of their fears and become potential buyers. The act of selling removes the anxiety, restores equanimity, and gives them the cash to buy” Leon Levy

“When things are bad, we’re going to parachute in and look” Scott Hood

“The best time to buy stocks is when they are cheap. However, when stocks are at their cheapest, there are usually a whole host of reasons not to buy them” Christopher Browne

“We’re very focussed on paying a cheap price, and that only comes about when there’s some short term challenge” David Herro

“Our clients are often surprised to find that our biggest gains spring from buying up stocks during their worst performance periods. It's after these downturns that committed investors learn that market adversities often create great long-term benefits, and that it truly can pay to ignore the crowd.” Bruce Berkowitz

“A market downturn doesn’t bother us. For us and our long-term investors, it is an opportunity to increase our ownership of great companies with great management at good prices. Only for short-term investors and market timers is a correction not an opportunity.”  Warren Buffett

"We should not lament market downdrafts, but instead remain completely focussed on taking advantage of them" Jim Mooney

“No one enjoys a sharp market downturn, with mark to market losses, growing panic and economic dislocation.  Yet a downturn is a necessary precursor to an upturn; the seeds of recovery and eventually of substantial profit are sown amidst the carnage." Seth Klarman

"You know the prose : "Maintain buying reserves until current uncertainties are resolved," etc.  Before reaching for that crutch, face up to two unpleasant facts: The future is never clear; you pay a very high price for a cheery consensus.  Uncertainty actually is the friend of the buyer of long-term values"  Warren Buffett

"My philosophy is that life if not about waiting for a storm to pass.  It is about dancing in the rain.  One usually can read a weather map and reasonably predict when a storm will pass.  If one waits for the moment when the sun breaks out, there is a high probability others already will have reacted to the improved prospects and already driven up the price of the stock - and thus the opportunity to earn large profits will have been missed"  Ed Wachenheim

Article by Investment Master Class


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