Peter Lynch on how investors can take advantage of market corrections?

Wise words from one of the greatest investors of all time!

via @intrinsiccompounding
Avatar of charlie.munger.wisdom

charlie.munger.wisdom

2024-04-14 02:20:38

you should study history
and history the important thing you learned from
what you learn from history as the market goes down
it goes down along
the math is simple has been ninety three years century this is easy to do
the markets had fifty declines of ten percent or more
so fifty declines in ninety three years
but once every two years the market falls ten percent
we call that a correction that means
that's a euphemism for losing a lot of money rapidly but
we followed a correction and
so fifty declines in ninety three years about once every two years a market falls ten percent
of those fifty declines fifteen have been twenty five percent or more
that's known as a bear market
we've had fifteen declines to ninety three years
so every six years the market's gonna have a twenty five percent decline
that's all you need to know
you need to know the markets can go down sometimes
if you're not ready for that
you shouldn't own stocks and it's good when it happens
if you like a sack of fourteen it goes to six
that's great
you understand the company you look at the balance sheet and are doing fine
you hoping to get to twenty two with it
fourteen to twenty two is terrific six to twenty two is exceptional
so you take advantage of these declines they're going to happen no one knows when they're gonna happen
it would be very people tell you about half the fact that they predicted it but they predicted it fifty three times
and
so you can take advantage of the volunteer in the market if you understand what your own