“If you buy a cheap stock when the market is high, it is a
challenge because, if the market being high is followed by a general decline in
prices, then for you to make money in your cheap stock, you have to swim
against the tide. If you buy when the market is low, and that lowness is going
to be corrected by a general inflation, and you buy your cheap stock, then you
have the tailwind in your favor….I think it is unrealistic and maybe hubristic
to say, “I don’t care about what is going on in the world. I know a cheap stock
when I see one.” If you don’t follow the pendulum and understand the cycle,
then that implies that you always invest as much money as aggressively. That
doesn’t make any sense to me. I have been around too long to think that a good
investment is always equally good all the time regardless of the climate.” –Howard
Marks
