"you can get everything right in your assessment of the business and its risks but if you buy when the market is buoyant and general sentiment turns you can still get it wrong...unless you have a long term outlook you can't ignore market risk Clark Kent..."
Actually what you said is not entirely true. By far the most important decision you have to make is selecting the right companies to invest in. Sure we all like to get bargains, but if you can pick long-term winners, this game can be very forgiving.
Take a company like Woolworths, which has found a way to generate 40% return on shareholders funds year in year out. Now thats some money machine !.
If you are in any way attuned to how things really work, you will know that long-term the return of any asset converges to its rate of profitability.
Therefore whether you bought WOW at $3.00 in 1993 or $2.40 (a 20% difference) you will find that 13 years hence the difference in you annual compound return would be very small, say 19% vs 20% (I havent done the exact calculation but I expect the numbers to be of that order).
Therefore the skill that really counts is to know how to get into the WOW's and avoid the AMC's (or HIH's !!!!).
Now, if you wnat to get a bit extra, by all means buy on the so-called dips. But in my experience, this kind of timing has negligible benefits compared to buying the 'good sh*it' as early as practicable.
