Market Crash

“Experience in former markets indicates that just as they are too high in bull markets, they get too low in bear markets.”

“Having a long term strategy may seem a quaint idea in a market dominated by high frequency trading, the 24 hour news cycle, the ubiquitous and shrill blogosphere, flash crashes, and where it is repeated as though divinely given that buy and hold is dead.”

“It has been well and correctly remarked that the only things that go up in credit crisis and financial panic are correlations and volatility.”

“Momentum crashes are fast, violent, and predictable in hindsight.”

“The reward for momentum is compensation for crash risk”

“One of the brightest operators who ever played the unbeatable game once told me that all he asked in a bull market — or a bear market, for that matter — was to be the last fool but one.”

“The demand for reform is naturally greatest after a market crash, which is usually precipitated by multitudes of little gamblers who are themselves their own victims.”

“On October 24, 1929, millions of Americans recalled poignantly the hundreds of blithe prophecies that our feelings never again would be harrowed by absurd exhibitions of mob hysteria or mass emotionalism in the stock market. We were living in a new era.”

“Fortunes are made during panics, not booms.”

“Euphoria can lift housing and dot-com prices; panic can send sound banks tumbling.”

“One of the important factors behind the fluctuation between bull and bear markets, between booms and crashes and bubbles, is that investor memory has to fail us – and fail universally – in order for the extremes to be reached.”

“A chief cause of crises, panics, runs on banks, etc., is that risks are not independently reckoned, but are a mere matter of imitation. A crisis is a time of general and forced liquidation.”

“Of all the mysteries of the stock exchange there is none so impenetrable as why there should be a buyer for everyone who seeks to sell. October 24, 1929 showed that what is mysterious is not inevitable. Often there were no buyers, and only wide vertical declines could anyone be induced to bid.”

“Once a boom is well started, it cannot be arrested. It can only be collapsed.”

“As a rule, Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works.”

“The malady of commercial crisis is not, in essence, a matter of the purse but of the mind.”

“There will be bear markets about twice every 10 years and recessions about twice every 10 or 12 years but nobody has been able to predict them reliably. So the best thing to do is to buy when shares are thoroughly depressed and that means when other people are selling.”

“In times of crisis, assets are mispriced.”

“I’ve never understood the apocalyptic theory of investing. If the world really does collapse, is it really going to do you any good to have a few Krugerrands in your pocket?”

“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready. You won’t do well in the markets. If you go to Minnesota in January, you should know it’s gonna be cold. You don’t panic when the thermometer falls below zero.”

“The man in the street associates the acquisition of wealth with rising markets; failures, ruin, depression, panics with falling markets.”

“Bull markets and bear markets last long enough so that the average trader is likely to forget by the time the climax is approaching that any sort of movement is possible.”

“It would be silly to expect every bear market to turn into the Great Depression. It would be equally wrong to expect that a fall from overvalued, to more fairly valued, couldn’t badly overshoot on the downside.”

“It is only in a bear market that the value investing discipline becomes especially important because value investing, virtually alone among strategies, gives you exposure to the upside with limited downside risk.”

“When the next fear-inspired panic occurs, investors’ finger-pointing will almost certainly be aimed outward, while a good part of the blame should instead be directed inward.”

“People seeking answers to why the market plunged usually emphasize the immediate events that precipitated a selling panic, when in fact these events are but minor symptoms of much more severe underlying problems.”

“We would rather underperform in a huge bull market than get clobbered in a really bad bear market.”

“An old saying is that in a bull market, your time horizons grow longer and longer. In a bear market, they grow shorter and shorter.”