Howard Marks explains why the best investment opportunities feel wrong. The optimal time to buy is when pessimism is highest and everyone else is afraid. A retired trader said it simply: buy when you don't want to.
Came across a great quote within the last year from a guy who's a retired trader. When the time comes to buy, you won't want to. That encapsulated so much wisdom because what is it that causes the great moments to buy?
It's probably the point of lowest consensus. When most people don't believe would be the time that the price is going to be the lowest, right? It's the time with either the most uncertainty or the most pessimism or the most fear, most conservatism. And so you also want to be all those things. What's the cause?
Bad news, either exogenous or in the economy, faltering corporate fortunes, declining stock prices, widespread losses, and a proliferation of articles about how terrible the future looks. So that's why you don't want to buy at the low. Who would want to buy under those circumstances? The only thing I'm sure of is that if you zig when they zig, you're not going to outperform. A battlefield hero is not somebody who's unafraid. It's somebody who does it anyway.
