What? Since when is bad news good news?
Recent market declines has brought out the innumerable bad news articles on all major news sites. You can read how bad it is, and how bad it will be. You can be inundated with fear, uncertainty and doubt.
With price declines, no one knows how far things will fall. We have history to confirm it could get really bad. The Great Recession of 2008-9 and the Great Depression lurk in the back (or the front) everyone’s mind. Every prognostication seethes with fear and trepidation.
Or
Perhaps there is another way to look at it. Perhaps the silver lining to the dark cloud.
Let’s look at things clearly, without conditioning or expectations. What is happening?
What is happening?
Prices have declined. That is the truth, no varnish needed.
That famous saying “Buy Low, Sell High” is the foundation of human activity in the market.
And now with prices low, what is to be done?
We see that sell-offs continue, which is under the circumstances, unsurprising. Bad new breeds more bad news.
But low prices in and of themselves means opportunities.
If low prices satisfy the “Buy Low” maxim, why do most people run in terror when prices decline?
The reason is because the context in which these low prices now exist are in the context of a bear market. Humans tend to think as a herd, and a bear market brings out group fear.
Looking dispassionately at low prices, we could conclude that these are opportunities for gain. In the context of a bear market, we could conclude that these are opportunities for loss.
So it is within the context in which we see things that determines how we interpret them.
How do you interpret? Glass half-full, half-empty, or too big? Let me know here.
The photo is of a Nigerian tusk used by an Ebo warrior. The kings (obas) of the Benin Kingdom and the high-ranking chiefs who served them displayed ivory tusks on altars to honor their ancestors. Courtesy Minneapolis Institute of Art.
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