One characteristic of a bubble is that people stop looking at price.
Investing guru Ben Graham (in "The Intelligent Investor") on the problem: " ... we hope to implant in the reader a tendency to measure or quantify. For 99 issues out of 100 we could say that at some price they are cheap enough to buy and at some other price they would be so dear that they should be sold. The habit of relating what is paid to what is being offered is an invaluable trait in investment. In an article in a women’s magazine many years ago we advised the readers to buy their stocks as they bought their groceries, not as they bought their perfume. The really dreadful losses of the past few years (and on many similar occasions before) were realized in those common-stock issues where the buyer forgot to ask 'How much?' "
Sir John Templeton: “The four most expensive words in the English language are 'This time it’s different.' ”
Good luck, @Al18. I'll be sitting this one out, as I have with 50 years of past bubbles.
the flip side of missing bubbles is few actually can consistently not only miss the worst days but they can’t even reliably miss the worst time frames .
so they end up missing the best days .
investors who try to time don’t realize how few best days we have .
these best days if missed have a forever effect on future compounding.
University of Michigan Professor H. Nejat Seyhun analyzed 7,802 trading days for the 31 years from 1963 to 1993 and concluded that just 90 days generated 95% of all the years’ market gains — an average of just three days per year. miss those few days and you hurt your return .
If you were able to miss the worst days , you would have had an incredible return .
But It is near impossible to not only reliably miss the worst days but it is just as hard to miss the worst time frame as a whole .
catching the best days is easy as pie ... just be invested . NO PREDICTING NEEDED .
but it grows worse when you miss those best days which are so few
Here's how a $10,000 initial investment fared over the past 20 years depending on if its investor stayed invested or instead, missed some of the market's best days.
January 4, 1999 to December 31, 2018
Dollar value. Annualized Performance
Fully invested (S&P 500 index). $29,845 5.62%
Missed 10 best day $14,895. 2.01%
Missed 20 best days $9,359. minus - . 33%
Missed 30 best day. $6,213 minus -2.35%
Missed 40 best days $4,241 minus -4.2%
Missed 50 best days $2,985. minus -5.87%
Missed 60 best day $2,144 minus -7.41%