"Today people who hold cash equivalents feel comfortable.They shouldn't.They have opted for a terrible long-term asset,one that pays virtually nothing and is certain to depreciate in value."
Warren Buffett
And yet another piece by Mr Buffett which i like to read
Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower in a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.
Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”
Warren Buffett
Even though everyone is not Warren Buffett, the message you can get out of this is be different in your reasoning and don't follow the herd as the herd can only go so far. My thoughts for both bear and bull markets can be referred to as sowing and reaping seasons.When prices start to look silly either undervalued or oversold then it's probably time you make a WISE decision.
If we're buying these stocks at distressed prices and your analysis and calculations of the stock has influenced you to be buying at levels which offer a considerable margin of safety then surely 5-10 years down the track the rewards will be reaped.
cheers
CER Price at posting:
8.8¢ Sentiment: LT Buy Disclosure: Held
