Wednesday, August 27, 2008

Buying in Bear Markets | Market Pessimism

"I will tell you how to become rich. … Be fearful when others are greedy. Be greedy when others are fearful."
-- Warren Buffett

What makes Buffett's quote especially relevant today is the following bit of information:

A recent New York Times article pointed out that bearish sentiment, as measured by the Conference Board, has hit an all-time high. Fully 55% of the people questioned in July expect the stock market to decline over the next 12 months.

Why is this important today? Because each time the bearish sentiment has exceeded 35% over the past 21 years, the market has confounded that sentiment by gaining ground over the following year, at an average pace of 20.5%.

from: The Fool

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