In the Kingdom of the Blind, the One-Eyed Man Is King. But Why Not See with Both?
“In the kingdom of the blind, the one-eyed man is king. And in the market of the fearful, the contrarian reigns supreme.”
March 16, 2025
Most investors stumble through the market like the blind, swayed by fear and greed, trapped in an endless loop of panic buying and selling. Like the one-eyed king, the contrarian rises above the herd by seeing what others cannot: opportunity in chaos.
But why settle for one eye when you can dominate with both?
This is where Warren Buffett’s timeless wisdom meets the cold precision of technical analysis. Buffett’s mantra, “Be fearful when others are greedy, and greedy when others are fearful,” is rooted in Mass Psychology. It’s the art of exploiting human emotion when the crowd succumbs to fear or euphoria.
However, understanding intrinsic value is only half the equation. The market leaves footprints—patterns, divergences, and volume shifts—revealing when fear is peaking, and true capitulation is underway.
By blending Buffett’s mastery of fundamentals with technical indicators like MACD crossovers, volume spikes, and oversold conditions, the modern investor gains an edge far sharper than those who rely solely on one discipline.
In a world of the blind, the one-eyed man wins. But the predator who sees with both psychology and technical precision? He owns the entire kingdom.
Why Does Warren Buffett Preach: “Be Fearful When Others Are Greedy, and Greedy When Others Are Fearful”?
Warren Buffett’s legendary advice is not mere bravado; it’s rooted in Mass Psychology (MP) and Contrarian Investing, the ability to think independently while the crowd succumbs to fear and euphoria.
1️⃣ The Psychology of the Herd
- Mass Psychology in Action: When fear grips the market, investors panic-sell, dumping quality stocks at irrational prices. This is driven by loss aversion, one of the strongest cognitive biases where the pain of losing far outweighs the joy of gaining.
- The Contrarian’s Edge: Buffett understands that the best opportunities arise when the masses are blind to value and overwhelmed by emotions. While others see catastrophe, the contrarian sees deep value hiding in plain sight.
2️⃣ The Mechanics of Market Cycles
- Greed Phase: When euphoria rules, asset prices soar beyond fundamentals. The crowd believes the market will only go higher, leading to bubbles (think dot-com bubble, housing crisis). This is when Buffett quietly exits.
- Fear Phase: Panic sets in, assets are dumped, and valuations collapse. This is when Buffett’s strategy shines. He swoops in, buying solid businesses at steep discounts.
3️⃣ The Power of Intrinsic Value & Technical Analysis (TA)
- Fundamentals First: Buffett evaluates a company’s intrinsic value, focusing on cash flow, earnings growth, and competitive advantages. When fear drives prices below intrinsic value, he loads up.
- TA Confirmation: While Buffett is a fundamentalist, smart traders can combine this with MACD bullish crossovers, oversold RSI signals, and volume spikes to indicate capitulation.
Buffett’s Greatest Contrarian Moves: Turning Fear into Fortune
1. The 2008 Financial Crisis: Betting Big on Stability
When the financial world was collapsing and fear gripped the market, Warren Buffett saw an opportunity. While others liquidated their portfolios in panic, Buffett invested billions in Goldman Sachs and Bank of America, securing favourable terms that guaranteed high returns. His $5 billion investment in Goldman Sachs provided the bank with much-needed liquidity and granted Berkshire Hathaway preferred stock with a 10% annual dividend and warrants to buy common shares at a discounted price. Similarly, his strategic move to back Bank of America during its crisis period yielded billions in profits as the bank recovered and thrived.
2. Coca-Cola in the 1980s: Capitalizing on Temporary Setbacks
In the 1980s, Coca-Cola faced temporary challenges, including concerns over new product launches and shifting consumer preferences. While the masses dumped the stock, Buffett recognized the company’s strong brand, global reach, and loyal customer base. He quietly accumulated a massive position, which would become one of Berkshire Hathaway’s most legendary investments. The dividends alone have generated billions in returns, while the stock price has multiplied many times over.
3. American Express in the 1960s: The Salad Oil Scandal
In the early 1960s, American Express was embroiled in the infamous Salad Oil Scandal, where fraudulent inventory practices led to massive losses. The stock tanked as fear gripped investors. Buffett, however, saw the company’s underlying strength and customer loyalty. He invested heavily, reaping extraordinary gains as American Express rebounded and cemented its position as a financial services giant.
4. The Washington Post in the 1970s: Media Power at a Discount
During the 1970s bear market, media giant The Washington Post was trading at a fraction of its intrinsic value. Buffett recognized the company’s powerful brand and influence and quietly acquired a substantial stake. Over time, the investment compounded massively, solidifying Buffett’s reputation as a contrarian investor who thrives on fear-driven bargains.
5. Apple in 2016: Embracing Tech When Others Hesitated
Despite his long-standing aversion to technology stocks, Buffett made a surprising move in 2016 by investing heavily in Apple. At the time, many analysts were sceptical of Apple’s growth potential, citing slowing iPhone sales and increasing competition. However, Buffett saw Apple’s ecosystem, customer loyalty, and massive cash flow potential. This investment became one of Berkshire Hathaway’s most profitable plays.
The Lesson: Buy When Fear Peaks, Hold When Euphoria Rules
Buffett’s contrarian approach is rooted in logic, patience, and discipline. He buys when others panic, leveraging mass psychology and fundamental analysis to identify opportunities. His strategy proves that true wealth is built not during euphoria but in moments of fear and uncertainty.
The Bottom Line
Greed when others are fearful is not about blind optimism. It’s about understanding human psychology, identifying value, and acting with patience and discipline.
In Closing: Master the Market or Be Crushed by It
💡 The crowd will always be driven by emotion—panicking in downturns and chasing euphoria in bull runs. The true winner is the one who harnesses mass psychology, leverages technical analysis and strikes with precision when the herd flees in terror.
Warren Buffett doesn’t simply buy stocks; he capitalizes on mispriced fear, accumulating assets when uncertainty paralyses others. This strategy, rooted in discipline and patience, allows him to amass wealth while the masses haemorrhage capital.
To thrive in the market, one must:
- Identify panic-driven opportunities and enter when fear peaks.
- Utilize tools like MACD and Fibonacci retracements to confirm trend reversals.
- Maintain emotional control and a long-term perspective, avoiding the herd’s irrational moves.
The market is a zero-sum game where the disciplined feast and the emotional are devoured. Choose your side wisely.
💡 The crowd will always react emotionally. The true winner plays the long game, ignores the noise, and pounces when the herd runs for the exit.
Buffett doesn’t just buy stocks; he buys mispriced fear.
