Bull Markets

As equity markets around the world reach a new high, investors need to remember a few things about the bull markets. Here are some comments made by famous investors who have seen many bull and bear markets in their careers.

“Bull markets ignore bad news, and any good news is a reason for a further rally.” Michael Platt

“Gresham’s Law says that the bad money [paper] drives the good money [specie] out of circulation; this accurately describes human behaviour when people are confronted with a cost-free choice. I now believe this accurately describes people’s choice of investment philosophies, especially late in a bull market, when the sloppy analysis drives out the disciplined assessment, and when the grab for return overwhelms the desire for capital preservation.” Seth Klarman

“The longer the bull market lasts the more severely investors will be affected with amnesia; after five years or so, many people no longer believe that bear markets are possible.” Benjamin Graham
“In investor behaviour, particularly during the last stages of a great bull market, perception of risk and actual risk are at opposite ends of the spectrum.” Leon Levy

“People tend to forget about the importance of the price they pay as the experience of a bull market just sort of dulls the senses generally.” Charlie Munger

“Once a bull market gets underway, and once you reach the point where everybody has made money no matter what system he or she followed, a crowd is attracted into the game that is responding not to interest rates and profits but simply to the fact that it seems a mistake to be out of stocks. In effect, these people superimpose an I-can’t-miss-the-party factor on top of the fundamental factors that drive the market. Like Pavlov’s dog, these ‘investors’ learn that when the bell rings – in this case, the one that opens the New York Stock Exchange at 9:30 a.m. – they get fed. Through this daily reinforcement, they become convinced that there is a God and that he wants them to get rich.” Warren Buffett

“The further you get away from a bear market, the greater the number of people who have convinced themselves they can handle the downside – until the next time, of course. In the interim, if the indices are performing well, then you can bet that many investors – individuals and professionals, alike – are going to feel pressure to do whatever they can to ride the bull.” Steven Romick

“Never confuse genius with luck and a bull market.” John Bogle

“In a bull market, it is advisable to restrain one’s greed. There is an old wall street saying, ‘The bulls make money, the bears make money. But what happens to the pigs?’. You can’t make 101 per cent. You shouldn’t even strive to make 100 per cent. Your goal should be 66.6% of a big move. Get out and then reinvest in something that has been newly studied.” Roy Neuberger

“It’s just the nature of a rip-roaring bull market. Fundamentals might be good for the first third or first 50 or 60 per cent of a move, but the last third of a great bull market is typically a blow-off, where the mania runs wild and prices go parabolic.” Paul Tudor Jones

“Common stocks should be purchased when their prices are low, not after they have risen to high levels during an upward bull-market spiral. Buy when everyone else is selling and hold on until everyone else is buying — this is more than just a catchy slogan. It is the very essence of a successful investment.” J Paul Getty

“Very early in my career, a veteran investor told me about the three stages of a bull market. Now I’ll share them with you. The first, when a few forward-looking people begin to believe things will get better. The second, when most investors realize improvement is actually taking place. The third, when everyone concludes things will get better forever. Why would anyone waste time trying for a better description? This one says it all. It’s essential that we grasp its significance.” Howard Marks

Source: http://mastersinvest.com/bullmarketquotes