History demonstrates that participants in financial markets are susceptible to waves of optimism. Excessive optimism shows the seeds of its own reversal in the form of imbalances that tend to grow over time.
The latter part of bull markets are typically led by stocks that are seen then as high quality, but the ones that do best are the ones that weren't seen as such high quality before.
It's only when the markets are perceived to have exhausted themselves on the downside that they turn. Trying to prevent them from going down just merely prolongs the agony.
The upward move at the beginning of a bull market is almost always huge compared with the vacillations late in the bear market. If you try to pick a bottom, you will miss a good part of the action.
We used to be lenders; now we're borrowers. We used to be sellers; now we're buyers. You can't win that way.
If you go back to 2001, the market had two violent short covering rallies then, although I know the market didn't officially get going until March 2003.
You do not have to be a rocket scientist to know that it is hard for a market to keep going up when more and more people are getting out.
