Get greedy when others are fearful?

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ThankYouJack
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Get greedy when others are fearful?

Post by ThankYouJack » Thu Dec 27, 2018 1:42 pm

I believe Warren Buffett said the time to be fearful is when others are greedy and the time to be greedy is when others are fearful. Does anyone follow this? And if so, how?

I’ve been age - 10 = fixed for a while but feel I could be more aggressive. I’m wondering if I should switch to age - 20 if this bear market becomes bigger. Then maybe switch back to age - 10 when the market is 10% from its peak.

masonstone
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Re: Get greedy when others are fearful?

Post by masonstone » Thu Dec 27, 2018 1:46 pm

Market timing doesn’t work

02nz
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Re: Get greedy when others are fearful?

Post by 02nz » Thu Dec 27, 2018 1:47 pm

I think of this more as an aphorism rather than actual investing advice to be implemented. In a sense rebalancing when the market is down is taking advantage of lower prices to buy more. Going farther - changing allocations based on market movements, as you're thinking about- would be market timing. To revise the Buffet aphorism a bit, it's better not to get greedy but rather to keep your resolve when others are fearful.

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whodidntante
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Re: Get greedy when others are fearful?

Post by whodidntante » Thu Dec 27, 2018 1:53 pm

I don't think others are fearful right now. This is more of a market burp with weak hands folding. People were fearful ten years ago.

selters
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Re: Get greedy when others are fearful?

Post by selters » Thu Dec 27, 2018 2:38 pm

masonstone wrote:
Thu Dec 27, 2018 1:46 pm
Market timing doesn’t work
Well, for what it's worth, historical evidence suggests that disciplined rebalancing from bonds to stocks when stocks fall provides you with a higher risk-adjusted return (compared to just letting it ride, I would expect).
Last edited by selters on Thu Dec 27, 2018 2:50 pm, edited 1 time in total.

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TheTimeLord
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Re: Get greedy when others are fearful?

Post by TheTimeLord » Thu Dec 27, 2018 2:43 pm

whodidntante wrote:
Thu Dec 27, 2018 1:53 pm
I don't think others are fearful right now. This is more of a market burp with weak hands folding. People were fearful ten years ago.
+1
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

KJVanguard
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Re: Get greedy when others are fearful?

Post by KJVanguard » Thu Dec 27, 2018 3:00 pm

whodidntante wrote:
Thu Dec 27, 2018 1:53 pm
I don't think others are fearful right now. This is more of a market burp with weak hands folding. People were fearful ten years ago.
A burp that lost me half a million before my Vanguard account was up $53,000 yesterday, but down again today. Quite a roller coaster. I remember 2008 quite well (you always remember when you lost money).

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TheTimeLord
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Re: Get greedy when others are fearful?

Post by TheTimeLord » Thu Dec 27, 2018 3:05 pm

KJVanguard wrote:
Thu Dec 27, 2018 3:00 pm
whodidntante wrote:
Thu Dec 27, 2018 1:53 pm
I don't think others are fearful right now. This is more of a market burp with weak hands folding. People were fearful ten years ago.
A burp that lost me half a million before my Vanguard account was up $53,000 yesterday, but down again today. Quite a roller coaster. I remember 2008 quite well (you always remember when you lost money).
Surprised you didn't make $100,000 yesterday.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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Riley15
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Re: Get greedy when others are fearful?

Post by Riley15 » Thu Dec 27, 2018 3:10 pm

ThankYouJack wrote:
Thu Dec 27, 2018 1:42 pm
I believe Warren Buffett said the time to be fearful is when others are greedy and the time to be greedy is when others are fearful. Does anyone follow this? And if so, how?

I’ve been age - 10 = fixed for a while but feel I could be more aggressive. I’m wondering if I should switch to age - 20 if this bear market becomes bigger. Then maybe switch back to age - 10 when the market is 10% from its peak.
Warren Buffett can afford to be very greedy and lose 99% percent of his wealth and still be in the top 1%. Can you?

Admiral
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Re: Get greedy when others are fearful?

Post by Admiral » Thu Dec 27, 2018 3:25 pm

ThankYouJack wrote:
Thu Dec 27, 2018 1:42 pm
I believe Warren Buffett said the time to be fearful is when others are greedy and the time to be greedy is when others are fearful. Does anyone follow this? And if so, how?

I’ve been age - 10 = fixed for a while but feel I could be more aggressive. I’m wondering if I should switch to age - 20 if this bear market becomes bigger. Then maybe switch back to age - 10 when the market is 10% from its peak.
Your AA should not be based on or influenced by market swings, up or down, and certainly not on aphorisms. Pick an AA that matches your appetite for and need to take risk, and stick to it, rebalancing when appropriate.

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Earl Lemongrab
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Re: Get greedy when others are fearful?

Post by Earl Lemongrab » Thu Dec 27, 2018 5:25 pm

I think people are more confused than fearful.

GoldenFinch
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Re: Get greedy when others are fearful?

Post by GoldenFinch » Thu Dec 27, 2018 5:56 pm

Earl Lemongrab wrote:
Thu Dec 27, 2018 5:25 pm
I think people are more confused than fearful.
I agree completely. The volatility is quite something. Regardless of what’s causing it, people seem confused (referring to reactions described in the press and elsewhere). That’s why sticking to your plan is the best response.

SlowlySaving
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Re: Get greedy when others are fearful?

Post by SlowlySaving » Thu Dec 27, 2018 6:58 pm

I see no problem investing more when the market is down. It may go down more but I understand accumulating more at lower levels. Good luck!

2015
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Re: Get greedy when others are fearful?

Post by 2015 » Thu Dec 27, 2018 7:21 pm

Earl Lemongrab wrote:
Thu Dec 27, 2018 5:25 pm
I think people are more confused than fearful.
This.
People were petrified ten years ago.

mike.li.uber
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Re: Get greedy when others are fearful?

Post by mike.li.uber » Thu Dec 27, 2018 7:42 pm

selters wrote:
Thu Dec 27, 2018 2:38 pm
masonstone wrote:
Thu Dec 27, 2018 1:46 pm
Market timing doesn’t work
Well, for what it's worth, historical evidence suggests that disciplined rebalancing from bonds to stocks when stocks fall provides you with a higher risk-adjusted return (compared to just letting it ride, I would expect).
+1

I think bogle also "times" market, in a broader sense.

remember the return of a long term stock index investment depends on three factors, and one of them is initial dividend yield rate.

when market go bear, prices go down everywhere, that would mean dividend yield rate is, to some extent, going higher, which makes a good start point for future growth.

this is the root theoretical reason why buying more in bear market is important.

How much the future growth rate will be is the second factor, and that's another question.

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