BUYING THE BOTTOM?

"I never buy at the bottom and I always sell too soon.” Baron Rothschild

“If you wait for the robins, spring will be over.” Warren Buffett, 2008

“Your chances of picking the bottom of the market are very slim, but if you’re within five or ten percent, your gains can be extraordinary.” Shelby Davis

“Some people boast of selling at the top of the market and buying at the bottom – I don’t believe this can be done except by latter-day Munchausens. I have bought when things seemed low enough and sold when they seemed high enough. In that way I have managed to avoid being swept along to those wild extremes of market fluctuations which prove so disastrous.” Bernard Baruch

“In our experience, the only setting in which investors reliably buy at the bottom, sell at the top or go to cash at the right moment is a cocktail party. During market hours, seeing clearly into an inherently cloudy future is far more challenging.” John Harris

“No man is more entitled to buy at the bottom than Buffett, and yet no man is more aware of the foolishness in trying.” Frank Martin

“At major turning points in markets, market prognosticators are generally wrong.” Leon Levy

“It’s difficult - and, I later came to conclude, impossible - to determine turning points.” Paul Singer

"We seldom distinguished ourselves just before turning points in the market. We exercised our skills by anticipating life after turning points, rather than by trying to keep up with the madness that preceded them." John Neff

“Since the ‘bottom’ is only declared in retrospect, those who wait for it almost always go away empty-handed.” Frank Martin

“Even in more normal markets the typical investor feels uncomfortable when he buys too soon and unhappy when he sells too soon. Yet to be a true practitioner of the buy-low-sell-high rule he must be entirely ready to do both.” Benjamin Graham

“The lesson learned here is that we are never able to buy at the low. Almost every stock I’ve ever had in the portfolio has always declined after we buy it, and thankfully most usually don’t go down to this extreme, but I think it is pretty normal to have it go down and I almost expect it now.” Mohnish Pabrai

“You must buy on the way down. There is far more volume on the way down than on the way up, and far less competition among buyers. It is almost always better to be too early than too late, but you must be prepared for price markdowns on what you buy.” Seth Klarman

“We never know when we’re at the bottom. A bottom can only be recognized in retrospect: it was the day before the market started to go up. By definition, we can’t know today whether it’s been reached, since that’s a function of what will happen tomorrow. Thus, “I’m going to wait for the bottom” is an irrational statement. If you want, you might choose to say, “I’m going to wait until the bottom has been passed and the market has started upward.” That’s more rational. However, number one, you’re saying you’re willing to miss the bottom. And number two, one of the reasons for a market to start to rise is that the sellers’ sense of urgency has abated, and along with it the selling pressure. That, in turn, means (a) the supply for sale shrinks and (b) the buyers’ very buying forces the market upward, as it’s now they who are highly motivated. These are the things that make markets rise. So if investors want to buy, they should buy on the way down. That’s when the sellers are feeling the most urgency and the buyers’ buying won’t arrest the downward cascade of security prices.” Howard Marks, 2020

“A lesson from previous episodes of stock market panic is that it is impossible to identify the bottom and almost as difficult to get money invested after the market has turned – because prices rally so quickly." Nick Train, 2020

“A savant is one who buys or sells within 20% of the top or bottom. Most who believe they’re smart enough to recognize and take appropriate action to capitalize on a market top or bottom as it is occurring are likely more idiot than savant.” Frank Martin

"You never get the high and you never get the low." Walter Schloss

“In my experience, most people who are lucky enough to sell something before it goes down get so busy patting themselves on the back they forget to buy it back.” Howard Marks

“The important turning points in markets are never identified with precision in advance by ‘experts’ and policymakers. This lack of foresight is not surprising, because markets and the course of the economy are not model-able scientific phenomena but rather are examples of mass human behavior, which are never predictable with anything like precision. But what is surprising is that even the most sophisticated investors, traders and commentators continue to rely on predictions issued by those who have no record of success at such forecasts.” Paul Singer

"While it is always tempting to try to time the market and wait for the bottom to be reached (as if it would be obvious when it arrived), such a strategy has proven over the years to be deeply flawed. Historically, little volume transacts at the bottom or on the way back up and competition from other buyers will be much greater when the market settle down and the economy begins to recover. Moreover, the price recovery from a bottom can be swift. Therefore, an investor should put money to work amidst the throes of a bear market, appreciating things will likely get worse before they get better" Seth Klarman

"Nobody can know where the bottom (or top) is. That is why we normally ease into positions and out, and in bear markets test the waters rather than doing big splashy “cannonballs” into the pool. The worst part of bear markets is not necessarily the cascade of paper for sale at declining prices; rather, it is that liquidity disappears for both buyers and sellers, making it even more difficult to enter or exit a position at the apparent market price." Paul Singer

"Many seem allergic to buying investments in the face of expected bad news - even when prices have fallen to bargain levels - if that news seems likely to drive the price still lower.  In a sense, many investors will keep trying to satisfy short-term (and ultimately irrelevant) objectives, even at times when bargains are widespread. After all, securities can always trade lower before they move higher. Trying to identify the absolute low is a fool's errand." Seth Klarman

"I don't kid myself that I can reliably bottom-tick or top-tick anything." Whitney George

“To think that you’ve picked the bottom, I don’t really know why anybody would think that, that’s just an arbitrary moment that you happen to be looking at X, Y, Z stock because there are zillions of them and they trade all the time.” David Abrams

"We don’t try to pick bottoms. We don’t have an opinion about where the stock market’s going to go tomorrow or next week or next month. So to sit around and not do something that’s sensible because you think there will be something even more attractive, that’s just not our approach to it. Anytime we get a chance to do something that makes sense, we do it... So picking bottoms is basically not our game. Pricing is our game. And that’s not so difficult. Picking bottoms, I think, is probably impossible. When you start getting a lot for your money, you buy it." Warren Buffett

“Waiting for the bottom is folly. What, then, should be the investor’s criteria? The answer’s simple: if something’s cheap – based on the relationship between price and intrinsic value – you should buy, and if it cheapens further, you should buy more.” Howard Marks

“Our job, and style, is not to pick tops and bottoms with precision (actually, not to pick them at all), but to have a portfolio that can make some money in normal times and keep it when the music stops for any reason, the timing of which is always a surprise even if you keep a sharp eye on the disc jockey.” Paul Singer