2011 Value Investing Congress Notes
http://www.scribd.com/doc/54958483/2011-Value-Investing-Congress-Notes
o Constantly going between greed and fear, risk tolerance and risk aversion, and optimism and pessimism
o In theory, the pendulum should be at the happy medium
On average it is in the middle
But it spends little time there
Excesses constitute the errors of herd behavior
3 stages of a bull market
Few people feel things are getting better
Most people realize improvement is taking place
Everyone thinks things will get better forever
"What the wise man does in the beginning, the fool does in the end."
o The last buyer pays the price
3 stages of a bear market
Few people realize that things are overpriced and dangerous
Most people see the decline is underway
Everyone believes that things will get worse forever
o Great opportunity to buy if we can behave counter-cyclically - Importance of being a contrarian.
Ben Claremon: The Inoculated Investor http://inoculatedinvestor.blogspot.com/
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