On Fear and Greed

Nov 2001

We have no idea—and never have had—whether the market is going to go up, down, or sideways in the near or intermediate term future.  What we do know, however, is that occasional outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community.  The timing of these epidemics will be unpredictable.  And the market aberrations produced by them will be equally unpredictable, both as to duration and degree.  Therefore, we never try to anticipate the arrival or departure of either disease.  Our goal is more modest:  We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.