BULL MARKETS

“When prices go up enough, everybody believes something, even if it is only that everybody else is just about to believe.” Adam Smith, The Money Game

“The top of a bull market - the only time people will believe in a repeal of common sense.” John Train

“If it trades like a bull market, it’s a bull market.” Colm O’Shea

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

"Bull markets can obscure mathematical laws, but they cannot repeal them." Warren Buffett

“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

"Scarce to begin with, sober reflection gets even scarcer as bull markets progress." John Neff

“After a bull market that goes on for years, who is managing most of the money? The bears are all unemployed; they’re not managing any money at all. You have a few very flexible smart people, but they run relatively small amounts of money, so they don’t matter either. The managers who are relentlessly bullish and who buy more every time the market goes down will be the ones who end up managing most of the money. So, you shouldn’t expect a big bull market to end in any rational fashion.” Colm O’Shea

“The longer a benign circle lasts the more attractive it is to hold financial assets. Those who are inclined to fight the trend are progressively eliminated and in the end only trend followers survive as active participants. As speculation gains in importance, other factors lose their influence. There is nothing to guide speculators but the market itself, and the market is dominated by trend followers. When a change in trend is recognised, the volume of speculative transactions is likely to undergo a dramatic, not to say catastrophic, increase. While a trend persists, speculative flows are incremental, but a reversal involves not only the current flow but also the accumulated stock of speculative capital. The longer the trend has persisted, the larger the accumulation.” George Soros

“Once a bull market gets under way, 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

"The fraud cycle follows the financial and business cycle with a lag. And that is as bull markets go on, people’s sense of disbelief is reduced and they begin to believe things that are too good to be true. It’s human nature. And bad people take advantage of that." Jim Chanos

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

"I mean, you know, bull markets make a lot of people very smart." Ed Yardeni

"In a bull market, one must avoid the error of the preening duck that quacks boastfully after a torrential rainstorm, thinking that its paddling skills have caused it to rise in the world. A right-thinking duck would instead compare its position after the downpour to that of the other ducks on the pond." Warren Buffett

"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 percent. You shouldn't even strive to make 100 percent. Your goal should be 66.6% of a big move. Get out and then reinvest in something that has been newly studied." Roy Neuberger

“When an epidemic of high-turnover speculation has displaced long-term investment as the standard conduct in the financial markets, the endgame is always never pleasant.” Frank Martin

"I have lived through or studied hundreds, possibly even thousands of bull and bear markets. In every bull market, whether it is IBM or oats, the bulls always seem to come up with reasons it must go on, and on and on. I remember hearing hundreds of times ‘We are going to run out of supply’. ‘This time is going to be different’, ‘Oil has to sell at $100 a barrell.’ ‘Oil is not a commodity’ [he laughs]. ‘Gold is different from every other commodity’. Well, damn, for 5,000 years it has not been different from every other commodity." Jim Rogers

“Markets may initially trend for fundamental reasons, but prices overshoot by ludicrous amounts. At some point, prices go up today simply because they went up yesterday.” Michael Platt

“It’s just the nature of a rip-roaring bull market. Fundamentals might be good for the first third or first 50 or 60 percent 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

"Whenever there is a bull market, people become hysterical after a few years. They think, 'Gosh, what has happened for the past five years is going to go on forever'." Jim Rogers

“There’s no question that rising prices create their own excitement. So when people see gold go up a lot — I mean, if your neighbor owns some gold, and you think you’re smarter than he is, and you didn’t own any, and your wife says to you, you know, ‘How come that jerk next door is making money, you know, and you’re just sitting here?’ It can start affecting behavior. And people like to get in on things that have been rising in price and all of that. But over time, that has not been the way to get rich.” Warren Buffett

"Bull markets and bear markets last long enough so that the average trader is likely to forget by the time the climax is approaching that any other sort of movement is possible." Philip Carret

"What could be more exhilarating than to participate in a bull market in which the rewards to owners of businesses become gloriously uncoupled from the plodding performances of the businesses themselves. Unfortunately, however, stocks can’t outperform businesses indefinitely." Warren Buffett

"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 successful investment." J Paul Getty

"Bulls will patiently explain that "it is different this time" .. Of course, any contrarian knows that just as a grim present is usually a precursor to a better future, a rosy present may be a precursor to a bleaker tomorrow." Seth Klarman

"During 'bull' markets, many investors tend to give themselves too much credit for favourable results and to give insufficient credit to the positive environment that played a large role in creating the results. This can lead to overconfidence on the part of the investor and resulting mis-assessment of risks." Ed Wachenheim

"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

“As a runaway bull market persists, its relentless vacuum cleaner eventually sucks everyone in. Investors who are skeptical about the perceived overvaluation are forced to watch as their career prospects melt down and security prices melt up. New rationalizations, disguised as rationales, enter the higher levels of discourse to justify jumping, or creeping, onto the asset-price train despite disdaining it when it was dozens of percentage points lower. A feeling of fear and acrophobia then becomes replaced by the giddy and disorienting feeling of finally being on track to make money along with the crowd and not feeling isolated in Cranky Valueland.” Paul Singer

“In the last stages of a bull market when you have a lot of people making lots of money on all sorts of things that are not within your circle of competence – you must be rational to accept that others are making money in things that are not for you. You must react with equanimity about that and not be affected by the fact that other people are making money and you are not making money in whatever situation. It takes a lot of rationality to do that. It’s not that easy to do when those other people make money – when they make what looks like easy money – on things you believe are not good investments.” Francois Rochon

“Market extremes represent inflection points. These occur when bullishness or bearishness reaches a maximum. Figuratively speaking, a top occurs when the last person who will become a buyer does so. Since every buyer has joined the bullish herd by the time the top is reached, bullishness can go no further, and the market is as high as it can go. Buying or holding is dangerous. Since there’s no one left to turn bullish, the market stops going up. And if the next day one person switches from buyer to seller, it will start to go down.” Howard Marks