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Re: Is the Market due for a Crash?
Probabilities are the only things we can be certain of.
One might speculate about market behaviour --which is mostly emotional. However, concentrating on the business will lead to a higher probability that in the long term one's analysis will be right. Concentrate on the business and the people running it and not on the ratios, indicators and other formulaic methods. This will cut out the noise that makes us panic.
Fear of prices going down is only of relevance when you are on the seller side. For a buyer this fear is irrational. Let's say you want to buy a house. It does not make sense being afraid the house now being available for 100,000$ instead of 200,000$. As a buyer this should make you very happy indeed.
The same principle can be applied to the market. The question you must answer is: how long is my anticipated timespan and how solid is the business I invested in.
You can then treat the business as a higher rate savings account and rejoice when you get an even better deal over time.
This is why understanding the business is far more important than any spread sheet work or graphs.
Does this sound like Buffet? Bet it does.
Focus investing rules.
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Anything too stupid to be said is sung. [Voltaire]
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