PESSIMISM

"How much pain have cost us the evils which have never happened." Thomas Jefferson

“Our fears are always more numerous than our dangers” Lucius Annaeus Seneca

“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty." Winston Churchill

"I've suffered a great many catastrophes in my life.  Most of them never happened" Mark Twain

"When investing, pessimism is your friend, euphoria the enemy"  Warren Buffett

“Whatever men attempt, they seem driven to try to overdo. When hopes are soaring I always repeat to myself “Two and two still make four and no-one ever invested a way of getting something for nothing".   When the outlook is steeped in pessimism I remind myself, “two and two still make four and you can’t keep mankind down for long” Bernard Baruch

“Could anyone really believe the earth was going to swallow up the incredible productive assets and unlimited human ingenuity existing in America?” Warren Buffett

"We find it helpful to read historical writings in times of pessimism in order to keep current events [2009] in perspective. Abraham Lincoln wrote in 1859:  "It is said an Eastern monarch once charged his wise men to invent him a sentence to be ever in view, and which should be true and appropriate in all times and situations. They presented him the words: 'And this, too, shall pass away.' How much it expresses! How chastening in the hour of pride! How consoling in the depths of affliction!"  Francois Rochon

“People are always predicting the end of the world, but the only things that end are the people; the world keeps going” Arnold Van Den Berg

“One needs to be an optimist in times of maximum pessimism” Sir John Templeton

"The bear market is where I do well because I am an optimistic contrarian.  If a lot of people become pessimistic, I become bullish, and vice versa" Roy Neuberger

“It is much easier to make money when the world is depressed, because when it stops being depressed, it’s like a compressed spring that comes back.” Howard Marks

“Times of universal pessimism usually represent remarkable buying opportunities, and times of buoyant optimism are often a clarion call to sell” Leon Levy

"People are always asking me where the outlook is good, but that’s the wrong question. The right question is: Where is the outlook most miserable?" Sir John Templeton

“In times of general market pessimism, this kind of “undiscounting” of some of the very finest investments can reach rather extreme levels. When it does, it affords the patient investor, with the ability to distinguish between current market image and true facts, some of the most attractive opportunities common stocks can offer for handsome long term profits at relatively small risk” Phil Fisher

“The most common cause of low prices is pessimism – sometime pervasive, sometimes specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It’s optimism that is the enemy of the rational buyer” Warren Buffett

"To have good opportunities of enrichment, we therefore need a climate of pessimism that brings good businesses to prices well bellow their intrinsic value. The higher the pessimism and related market fluctuations better are the opportunities to enrich ourselves. So the next time someone asks you “does the stock correction affects you?” you can answer: “Certainly, it improves my chances of getting richer”.  Francois Rochon

“Bull markets are born on pessimism, grow on scepticism, mature on optimism, and die on euphoria.” Sir John Templeton

"You can have cheap equity prices, or you can have good news, but you can’t have both” Leon Cooperman

"We rarely are able to identify fundamentally good businesses at acceptable valuations when everything is going right at the company." Jeffrey Ubben

“Bear in mind it is the hard reality of investment life that it is almost impossible to have both cheap valuations and good news”  Barton Biggs

“When things look bleak there’s a great opportunity for everyone.” Mario Gabelli

“The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell."   Sir John Templeton

"The skittish investor, no matter how intelligent, is always susceptible to getting flushed out of the market by the brush beaters of doom" Peter Lynch

"Buy when most people .. including experts .. are pessimistic, and sell, when they are actively optimistic" Ben Graham

"Unhealthy investor behaviour typically leads to selling during periods of great pessimism and leaping in at the top of bubbles.  Such emotional decisions can wipe out years of gains achieved through compounding" Chris Davis

"Skepticism and pessimism aren’t synonymous. Skepticism calls for pessimism when optimism is excessive. But it also calls for optimism when pessimism is excessive" Howard Marks

"We are in agreement with Sir John Templeton who used to say he liked pessimism because of the prices it produced" Frank Martin

"It sounds simple, but as anyone who has invested knows, moods are powerful, and it is not easy to buy in a period of profound pessimism, even if your mind tells you a particular moment could be the buying opportunity of the decade.  For one thing, all your friends are doing the opposite.  For another, pessimism is based on plausible arguments.  Although, you might tell yourself the bottom is at hand, you can never know that for a fact.  Playing the market is not a science, and the market is not characterised by causal relationships.  In the midst of panic, you might tell yourself it is highly unlikely for the market to fall further, but you can never say it is inconceivable.  However tiny, this room for doubt is wide enough to permit fears to flow in and paralyse the investor" Leon Levy

"The real opportunities in any market of common stocks will occur when it is the investors who carry the pessimism" Michael Burry

"Our enthusiasm is negatively correlated with the mood of the markets; we like the price of fear and uncertainty" Christopher Begg

"You should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy. It will also be unwarranted."  Warren Buffett

"The error is clear.  The herd applies optimism at the top and pessimism at the bottom.  Thus, to benefit, we must be sceptical of the optimism that thrives at the top, and sceptical of the pessimism that prevails at the bottom"  Howard Marks

"Because bad news sells, the media has a pessimistic bias.  Over many years, a large percentage of the severe problems predicted by the media never materialised, or proved to be far less severe than predicted" Ed Wachenheim

"If you look at the shelf of market-wisdom books of the last quarter century you find that a large number of them, and some of the most successful, have been those predicting imminent disaster.  They all predicted doomsdays that never arrived" Ralph Wanger

"Because it is new and unforeseen, the present crisis always looks worst than the previous ones. I keep preciously old articles from 1962, 1974, 1982, 1987 and 1990 to remind myself how gloomy the future looks in the depressive phases of the stock market." Francois Rochon

"The truth is, on balance, we will do more business when people are pessimistic.  Not because we like pessimism, but because it makes for prices that are much more attractive.  If you all have filling stations to sell in South Bend, I want to do business with whomever is most negative about filling stations.  And that's where I'm going to make the best buy" Warren Buffett