Market Correction Quotes

Stocks have reached what looks like a permanently high plateau.

The prevailing wisdom is that markets are always right. I take the opposition position. I assume that markets are always wrong… most of the time the trend prevails; only occasionally are the errors corrected. It is only on those occasions that one should go against the trend. This line of reasoning leads me to look for the flaw in every investment thesis. ... I am ahead of the curve. I watch out for telltale signs that a trend may be exhausted. Then I disengage from the herd and look for a different investment thesis. Or, if I think the trend has been carried to excess, I may probe going against it.

How do we know when irrational exuberance has unduly escalated asset values?

When markets fail, as they often do, collective action becomes imperative.

Reversion to the mean is the iron rule of the financial markets.

A market downturn, doesn't bother us. For us and our long term investors, it is an opportunity to increase our ownership of great companies with great management at good prices. Only for short term investors and market timers is a correction not an opportunity.

What do you call a stock that's down 90%? A stock that was down 80% and then got cut in half.

There is such an overvaluation of technology stocks that it is absurd. I would include our stock in that category. It is bad for the long-term worth of the economy.

Financial markets need to become less, not more, efficient.

Tough times helped many commodities producers become lean and mean through consolidation, mergers and cost-cutting. All that excess supply has been sopped up.

Subsidies should never be a permanent feature of any market. They should be introduced only to address market failure and they should be withdrawn gradually as those distortions in the market are addressed.

I think we have to bottom out. When the studios jump out of the ring, perhaps the artist can get back in.

Government intervention in the economy - through taxes, regulation and, most importantly, currency inflation - causes distortions and misallocations of capital that must eventually be unwound. The distortions degrade the general standard of living, and the economy goes into a recession (call that an incomplete cleansing). Or it goes into a depression - wherein the entire sickly structure comes unglued.

A crash really occurs when you suddenly have a violent downturn in the market that then heralds a long bull market.

It is right to intervene when markets are not working and people are getting hurt.

A bubble in early-stage funding means maybe there's $300 million at work when maybe there should be $150, as opposed to a bubble in late-stage funding which means there's $20 billion at work when there should be $3.

Fear and euphoria are dominant forces, and fear is many multiples the size of euphoria. Bubbles go up very slowly as euphoria builds. Then fear hits, and it comes down very sharply. When I started to look at that, I was sort of intellectually shocked. Contagion is the critical phenomenon which causes the thing to fall apart.

Normally, the market peaks before bad news emerges. That's what happened in 1929, and that's what happened in 2000.

Every time the market has corrected, since 2008, it's always been the Fed that's made the bottom. The Fed has always saved the market either by cutting rates, launching QE, or threatening to launch another round of QE.

When good news about the market hits the front page of the New York Times, sell.

Wall Street got drunk and now it's got a hangover. And the question is, how long will it sober up and not try to do those fancy financial instruments?

… a pin lies in wait for every bubble. And when the two eventually meet, a new wave of investors learns some very old lessons..

We don't have to guess what Mitt Romney would have done if he were president. Because he told us. He said we should let foreclosures - and I quote - 'hit the bottom' so the market could - I quote - 'run its course.'

The boom is called good business, prosperity, and upswing. Its unavoidable aftermath, the readjustment of conditions to the real data of the market, is called crisis, slump, bad business, depression.

Every new industry has exuberance in advance of reality. The techies get carried away. There is a period of despair. Then the pendulum swings the other way, and people see the long term potential. It's like when the Internet bubble crashed.