Christmas has come early for investors, with stocks again taking out record highs as indexes continue to climb toward year-end. At last check, the Dow DJIA+0.28% was up triple digits, while both the S&P SPX+0.49% and Nasdaq COMP+0.42% were even more firmly in the black.
Warren Buffett once said that as an investor, it is wise to be “Fearful when others are greedy and greedy when others are fearful.” This statement is somewhat of a contrarian view on stock markets and relates directly to the price of an asset: when others are greedy, prices typically boil over, and one should be cautious lest they overpay for an asset that subsequently leads to anemic returns.
When others are fearful, it may present a good value buying opportunity.
Even at the peak of the dot-com bubble, these traders weren’t as aggressively positioned or greedy as they are right now
So Be fearful.
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