-A steadily rising housing market erased fears of credit risk, since one’s credit really doesn’t matter if the collateral—in this case houses—is only going up in value
-Institutional selling of a low-priced small-capitalization spinoff,
for example, can cause a temporary supply-demand imbalance. If a company fails to declare an
expected dividend, institutions restricted to owning dividend-paying stocks may unload shares.
Bond funds allowed to own only investment-grade debt would dump their holdings of an issue
immediately after it was downgraded below BBB by the rating agencies. Market inefficiencies,
like tax selling and window dressing, also create mindless selling, as can the deletion of a stock
from an index.
-My firm’s approach is to seek situations where there is urgent, panicked or mindless selling.
-smart investors look to the market not as a guide for what to do but as a creator of opportunity.
-The best investors do not target return; they focus first on risk, and only then decide whether the projected return justifies taking each particular risk
-My firm’s approach is to seek situations where there is urgent, panicked or mindless selling.
-smart investors look to the market not as a guide for what to do but as a creator of opportunity.
-The best investors do not target return; they focus first on risk, and only then decide whether the projected return justifies taking each particular risk
