Ron Chernow Quotes

How do we know when irrational exuberance has unduly escalated asset values?

A crash really occurs when you suddenly have a violent downturn in the market that then heralds a long bull market.

When good news about the market hits the front page of the New York Times, sell.

It's only when the markets are perceived to have exhausted themselves on the downside that they turn. Trying to prevent them from going down just merely prolongs the agony.

You know, the market was down yesterday... my first thought when I heard-just on a personal basis, when I heard there had been this attack and I saw the futures this morning, which were really in the tank, I thought, Time to buy.

Fear and euphoria are dominant forces, and fear is many multiples the size of euphoria. Bubbles go up very slowly as euphoria builds. Then fear hits, and it comes down very sharply. When I started to look at that, I was sort of intellectually shocked. Contagion is the critical phenomenon which causes the thing to fall apart.

Stock market corrections, although painful at the time, are actually a very healthy part of the whole mechanism, because there are always speculative excesses that develop, particularly during the long bull market.

Normally, the market peaks before bad news emerges. That's what happened in 1929, and that's what happened in 2000.

Markets that are overpriced will correct and fall of their own weight..

You do not have to be a rocket scientist to know that it is hard for a market to keep going up when more and more people are getting out.

A bull market is like sex. It feels best just before it ends.

Those who had been riding the upward wave decide now is the time to get out. Those who thought the increase would be forever find their illusion destroyed abruptly, and they, also, respond to the newly revealed reality by selling or trying to sell. And thus the rule, supported by the experience of centuries: the speculative episode always ends not with a whimper but with a bang.

There is a lot of pain still to be had in the equity markets, particularly aimed at the risky end of the spectrum. We think the fair value on the market is about a third lower in the U.S. . .

Actually, one of the better indicators historically of how well the stock market will do is just a Gallup poll, when you ask Americans if you think it's a good time to invest in stocks, except it goes the opposite direction of what you would expect. When the markets going up, it in fact makes it more prone toward decline.

When the market goes to hell, it's more of an opportunity than a problem.

One thing on psychology, which we've always known, is that every investor says they're long-term - and they are until the market takes a hit.

Certainly there are bubble-like valuations of certain companies, but I don't think anyone out there believes that we're going to go back to doing business the way we used to do business.

There's a certain degree of speculation that goes into valuations. In so far as the market supports a valuation, everyone who gets a great one deserves it, but they should also be cautious because that speculation is temporary. I saw Yahoo go from $100 billion to $10 billion. It's not a long-term measure.

That strategy of buy and hold, which is the sound and sensible one for the individual, can have very dangerous and perverse effects for the market as a whole.

Fear, greed and hope have destroyed more portfolio value than any recession or depression we have ever been through.

You could have another downgrade. You could certainly have a stock market reaction that would be negative. And, I think nobody who looks at it objectively would want to happen.

When herding behaviour among investors ramps up, a stock's or index's growth rate can increase faster than exponentially, leading to more herding. This positive feedback brings the system to a tipping point. About two-thirds of the time, a crash results.

Once the smoke of the market crash clears off, you know, the Internet will pick back up and go. Take a look at what's happening to some of the big companies like eBay and Yahoo, the publicly traded stocks. You know, they're all coming back up off the mat now.

I can find only one bull market, in 1935, that didn't have some material indigestion within its first 12 months.

The bubble, as investing phenomenon, has been well studied ever since the 17th-century tulip bulb frenzy. Its counterpart in bear markets is not well understood.