Before we proceed we think these key sayings could help one fine-tune their market timing strategies, for they provide valuable insights into the mindset of players that were ahead of their times.
– Saying’s that Could help fine-tune market timing strategies
Before we continue, the following quotes from some brilliant individuals illustrate the value of keeping a cool head during times of panic.
“the time to buy is when there’s blood in the streets.” – Baron Rothschild
Losing your head in a crisis is a good way to become a crisis. – C.J. Redwine
Sooner or later comes a crisis in our affairs, and how we meet it determines our future happiness and success. Since the beginning of time, every form of life has been called upon to meet such crisis. – Robert Collier
Successful people recognize crisis as a time for change – from lesser to greater, smaller to bigger. – Edwin Louis Cole
It’s not always easy to do what’s not popular, but that’s where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognized. I’ve never bought a stock unless, in my view, it was on sale. Buy on the cannons and sell on the trumpets. – John Neff
In order to win as a contrarian, you need the right timing and you have to put on a position in the appropriate size. If you do it too small, it’s not meaningful. If you do it too big, you can get wiped out if your timing is slightly off. The process requires courage, commitment and an understanding of your own psychology. – Michael Steinhardt
I will tell you how to become rich…Be fearful when others are greedy. Be greedy when others are fearful. – Warren Buffett
To succeed as a contrarian, you must recognize what the crowd believes, have concrete justification for why the majority is wrong, and have the patience and conviction to stick with what is, by definition, an unpopular bet. – Whitney Tilson
Humans are prone to herd because it is always warmer and safer in the middle of the herd. Indeed, our brains are wired to make us social animals. We feel the pain of social exclusion in the same parts of the brain where we feel real physical pain. So being a contrarian is a little bit like having your arm broken on a regular basis. – James Montier
There are many who give advice, but few that offer guidance. – Anonymous
One of the Best Market Timing Strategists
To buy when others are despondently selling and to sell when others are euphorically buying takes the greatest courage, but provides the greatest profit. Bull markets are born in pessimism, grow on scepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell. If you want to have a better performance than the crowd, you must do things differently from the crowd. – Sir John Templeton
Panic is one of the key market timing strategies if employed correctly
When the trend is up, tactical investors should view panic through a bullish lens. Buy when the masses panic and sell when they are jumping up with joy.
The biophysicist that predicted the course the virus would take in China is predicting a similar outcome for the rest of the world. He correctly predicted the outcome that went against what all the other false prophets of doom were laying out.
Michael Levitt, a Nobel laureate and Stanford biophysicist, began analyzing the number of COVID-19 cases worldwide in January and correctly calculated that China would get through the worst of its coronavirus outbreak long before many health experts had predicted.
Now he foresees a similar outcome in the United States and the rest of the world.
While many epidemiologists are warning of months, or even years, of massive social disruption and millions of deaths, Levitt says the data simply don’t support such a dire scenario — especially in areas where reasonable social distancing measures are in place.
“What we need is to control the panic,” he said. In the grand scheme, “we’re going to be fine.”
And that is what we all need to focus on, for in the grand scheme of things we are going to be okay because there is not one piece of data that indicates the gloom and doom scenarios that are being portrayed have any chance of coming to pass. What astute investors need to focus on is the opportunity factor for that is what the ultra-wealthy and insiders are doing. Insiders would not be backing the truck and loading up if they thought the world was going to end. This is a classic case of the boy who cried wolf one too many times.
If you want to rob a man you, the best way is to polarise those around him. If you’re going to steal from the masses for decades to come, the best approach is to induce a state of helplessness via hysteria. Take a step back and look at how easily the crowd is allowing congress to rob them blindly for decades to come. There would have been no chance in hell that even one of the following packages would have had any chance of being approved three weeks ago.
- 150 basis point reduction in rates
- $700 billion bailout package
- Another 2 trillion-plus bailout package
- 2 trillion dollars injected in the markets by the Fed to provide liquidity
- Now the Fed has stated that they will inject as much money as they see fit. In other words, the Feds are openly admitting to forever Q.E.
Instead of creating a stir, the masses are demanding the Fed do more. In other words, they are now begging the governments to create more money out of thin air just because the picture appears to have changed. All of a sudden their arguments that too much money would be bad for the system are no longer an issue, for they are only concerned with improving the outlook now. They will rue the day, they gave their governments so much power, hence the saying, those that don’t learn from history are doomed to repeat it.
Regardless of whatever the experts state, one should never fight the Fed, for if you, you will end up dead. Dead as in dead broke.
Market Timing strategies: Mass Psychology should play an integral part
Just remember before you state you wish more people were/are smarter, picture how much harder it would be for you to navigate if all those around you were as sharp as you are. In the end, be thankful for the morons of the world for they provide investors with valuable data that can be used to increase one’s net worth and stay out of harm’s way. Furthermore, this data reveals what we have always stated, that no good deed goes unpunished and that a good Samaritan usually ends up as a dead Samaritan. Never offer to help someone that does not seek it; for they are likely to string you up the nearest pole if you do so.
The masses are still nervous, so the game plan is simple. Panic should be viewed as the code word for buying. Hence, when the masses panic and sell their shares jump in and buy and keep doing this until the trend turns negative.
Now, these wise guys that felt so smart by blasting the hell out of us during the market meltdown will weep tears of blood shortly if they are not already doing so. They made the same mistake before, promising never to fall for the fake news/hysteria that made them dump their shares at the bottom. But like mentally deranged individuals, they did precisely the same thing at the worst possible time, and what was their excuse; “it’s different this time”. Well, it’s always going to be different, and that’s the excuse the masses will use forever to justify the fact that they let emotion overrule logic and sold when they should have been buying. In the end, this story will be repeated again and again, because the mass mindset knows no better. Hence the saying misery loves company and stupidity simply demands it. Success is based on taking an approach that is bound to draw shouts of criticism from the masses. The only saying that comes to mind is the truth hurts and boy does it.