The Capital Spectator: You Buy When You Want To Sell And Sell When You Want To Buy

January 22, 2008 at 1:43 pm  ·  Category: Market Commentary, Portfolio Management, Sentiment Analysis

“History teaches that the greatest buying opportunities often arrive at moments of extreme stress in the financial system.  Positioning one’s mind, and one’s portfolio, to exploit such moments is vital for generating something other than mediocre performance for the long term.  For those who keep a clear head, financial blood in the street represents opportunity.”

“Blood In The Streets?”, James Picerno, The Capital Spectator

One of the most level headed and emotionally disciplined investors in the blogosphere is James Picerno of The Capital Spectator.  He has an especially good post up today titled “Blood In The Streets?”

One of the paradoxes of investing is that you make money by buying when it’s difficult to do so and selling when you feel like buying more.

At the same time, the balance that must be struck now is the risk of buying too early versus buying too late.  To deal with this problem, he recommends “time diversification” or not buying all at once.

I recommend that you read the post in its entirety for it is an excellent encapsulation of the overall psychology you need to take if you want to achieve above average returns.

I will also mention that I do not believe this is anywhere close, in time or price, to the absolute bottom of this bear market.

Posted by Greg Feirman  ·  Trackback URL  ·  Link
 

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