This is obviously a statement which needs to be understood...

This is obviously a statement which needs to be understood properly and not just applied universally in any context!

Obviously there are times when an entire industry is in trouble for some reason, but the industry isn't going to vanish, the companies aren't going to disappear. Like, say, big banks in a major economic crisis. People panic, the price goes down too low, so it's good to be greedy when others are fearful.

This is not the same as a situation where an individual company is garbage, will inevitably fail, and people are seeing that and selling out. Here, if you're greedy when others are fearful, you're just going to lose all your money.

You can decide which category CPH sits in.

Companies do fall over with shareholders losing literally all the money they put in. It's common. If you wanted to just apply this quote from Buffett without due consideration you'd simply go around buying up all the worst companies shortly before they went into administration.