It is depressing to watch your portfolios go down every day. Even with break yesterday, it is hard to be “Happy Happy, Joy Joy”, as written by our columnist Todd Kenyon. Are you in fear? Do you still want to buy?
With these questions we started our survey “Now we are in bear market, what are you doing with your investment?” Surprisingly (or not), more than 70% of the users who took the survey say they are buying! About 25% say they are waiting, and only less than 5% say they are selling.
If you are selling, make sure you are selling not because of fear. We all know this Warren Buffett quote: “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” Make sure you are selling because the stocks reached their fair value, or you realized your mistakes that you did not realize before.
If you are selling short, you might have made some money lately. But remember, by selling short your upside is limited, but down side is unlimited, and no one can predict the short term movement of stock prices.
If you are waiting, make sure you are not just WAITING. Read Warren Buffett’s shareholder letters again, do a lot of research in the mean time, set the prices that you want to buy regardless stock market conditions. If you are just waiting for a better market condition, you may be disappointed and regret, sooner or later.
If you are buying, make sure you are buying good companies only. Although historically buying at recessions and bear market rewards investors more than buying in bull market, but that is if you buy the right ones. Low quality business may as well bankrupt during recessions and bear market.
If you are buying, make sure you go through your investment decision checklist for every investment idea. If you don’t have an investment decision checklist, make one. We had a great discussion of investment check list before: Investment Decision Checklist
In short term you may still suffer. It is extremely important to know the level of confidence you have for your idea. Only with enough confidence in your research you know what to do if the stock prices decline another 50%.
We are proud that our users are not scared by the current market. Investing rewards those who are willing to learn, rational, and long term focused. We wish all of you prosper. While you are buying, we like to remind you the simple principles that Warren Buffett has been teaching us for a long time:
1. Buy Good Companies Only
2. Buy Simple Business Only
3. Do not Overpay
With these questions we started our survey “Now we are in bear market, what are you doing with your investment?” Surprisingly (or not), more than 70% of the users who took the survey say they are buying! About 25% say they are waiting, and only less than 5% say they are selling.
If you are selling, make sure you are selling not because of fear. We all know this Warren Buffett quote: “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” Make sure you are selling because the stocks reached their fair value, or you realized your mistakes that you did not realize before.
If you are selling short, you might have made some money lately. But remember, by selling short your upside is limited, but down side is unlimited, and no one can predict the short term movement of stock prices.
If you are waiting, make sure you are not just WAITING. Read Warren Buffett’s shareholder letters again, do a lot of research in the mean time, set the prices that you want to buy regardless stock market conditions. If you are just waiting for a better market condition, you may be disappointed and regret, sooner or later.
If you are buying, make sure you are buying good companies only. Although historically buying at recessions and bear market rewards investors more than buying in bull market, but that is if you buy the right ones. Low quality business may as well bankrupt during recessions and bear market.
If you are buying, make sure you go through your investment decision checklist for every investment idea. If you don’t have an investment decision checklist, make one. We had a great discussion of investment check list before: Investment Decision Checklist
In short term you may still suffer. It is extremely important to know the level of confidence you have for your idea. Only with enough confidence in your research you know what to do if the stock prices decline another 50%.
We are proud that our users are not scared by the current market. Investing rewards those who are willing to learn, rational, and long term focused. We wish all of you prosper. While you are buying, we like to remind you the simple principles that Warren Buffett has been teaching us for a long time:
1. Buy Good Companies Only
2. Buy Simple Business Only
3. Do not Overpay
