Rebound: Why it Pays to be Greedy when Others are Fearful

12:11 10/12/2018

Never ignore excessive fear. Instead, take full advantage of it, especially if it’s overdone. That’s where value can often be found, as we noted on Thursday. As Warren Buffett would advise, “Be fearful when others are greedy and greedy when others are fearful.” Or, as Sir John Templeton would advise, “Buy at the point of maximum pessimism.” Or even as Baron Rothschild would tell you, “Buy the blood in the streets, even if the blood is your own.” That’s because fear often breeds opportunity. And lo and behold, the Dow Jones is up 350+ points, as investors pounced on the fear. With bond yield fears still there, the start of Q3 earnings is lifting markets today. As noted by MarketWatch, “Third-quarter earnings will be a major driving as companies report over the coming weeks. According to FactSet, analysts are looking for earnings growth of about 19% and sales growth of 7%. While such growth points to an improving economy, there are also concerns that expectations have gotten too optimistic, or that the quarter could represent peak earnings, as much of the earnings growth can be credited to the tax bill passed late in 2017.” In addition, higher rates really aren’t the end of the world. In fact, they’re warranted when the economy is as strong as it has been. The Market’s Biggest Drag – AMZN 

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