Fear in markets is closer to panic than rational caution. We often assume this means selling losing positions rather than holding through the fear. However, the more damaging and common result of panic is paralysis. We fail to buy when prices are low because we fear they’ll fall further, or we hold onto a bad position too long out of fear of crystallizing loss.
Connections
You can be right, but look wrong for a long time
Link Explanation: Investors have to understand that prices can go into the red zone and stay there for a long time. But price itself is not the reason the buy or sell and investment. You have to do the upfront work to understand the thesis, and the thesis breakers so that you have conviction to hold or sell when the price gets out of line with the value of the company.
Reference
🟢 The Most Important Thing Uncommon Sense for the Thoughtful Investor