STREET DOGS

Especially during downdrafts, many investors impute intelligence to the market and look to it to tell them what’s going on and what to do about it. This is one of the biggest mistakes you can make.… Market participants have limited insight into what’s really happening in terms of fundamentals, and any intelligence that could be behind their buys and sells is obscured by their emotional swings.… It is the goal of some investors to sell on declines when the subsequent movements will be down but “buy the dips” when the subsequent movements will be up. If you think you can tell which is which from watching the market movements themselves, then we – again – have a fundamental disagreement. Future price movements can only be predicted on the basis of the relationship between price and fundamentals. And, given the market’s short-term volatility and irrationality, this can only be done in the long-term sense. The market has nothing useful to contribute on this subject. – Howard Marks

Price fluctuations have only one significant meaning to the true investor. They provide … an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times, [investors] will do better if [they] forget about the stock market and pay attention to … dividend returns and operating results. – Benjamin Graham

What will the stock market do next? It’s the wrong question. It’s the question that should never be asked, and if asked should never be answered. Asking this question shows that you believe there is some kind of order to this random madness. There is not. Anyone with an answer other than “I don’t know” is lying. Stop looking at the market as a casino and start treating stocks as businesses that you are trying to buy at a discount to fair value. — Vitaliy Katsenelson