Extremes are investors' early alarm system. When euphoria is everywhere, it's time to run for the hills. And when everyone is screaming that the world is on the precipice of demise, it's time to load up the truck. Billionaire Warren Buffett has been shelling out this piece of advice for decades: "Be fearful when others are greedy, and be greedy when others are fearful." Of course, that's easier said than done. But today I'm going to share with you the exact moment to start buying hand over fist... because it'll happen again. Viva la Bull!The Great Bear Market was gored to death on March 23. The fastest 30% drop in market history culminated in one of the shortest bear markets on record for the Dow Jones Industrial Average, as well as the quickest move ever from bear market low to bull market entry... By market standards, that was a blink of an eye. The Dow Jones has rebounded 31.5% from its lows on March 23. The S&P 500 is up slightly more than that, and the Nasdaq has rocketed 36% higher and is positive for the year. Previously, I pointed out that event-driven bear markets tend to be the shortest-lived and easiest to tame of all bear market breeds. Though, let's be honest... No one expected the most recent bear market to essentially be dead on arrival. But maybe we should have. There was a telltale sign that the bottom was in. Now, the current recovery has been so quick - and so classicly V-shaped - that its legitimacy is constantly in doubt. The airwaves are littered with experts saying stocks are overpriced. (Many of these people have been saying the same thing ever since the second quarter of 2009.) And it often seems that, for permabears, any stock price is overpriced. That negativity isn't just coming from the experts. It's also echoed by the average investor. But before you think that's a signal to race to the sidelines, take a breath. Because you might miss... |
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